A business is a decision-‐making organisation which uses a combination of inputs, processes and outputs.
Inputs ideas, money, labour, employees, raw materials, equipment
Processes action of turning inputs into outputs cooking, delivery, manufacturing Outputs final products goods or services
Businesses exist to satisfy the needs and wants of people, organisations and governments. Small Businesses have the same people fulfilling multiple roles Large Businesses Many specialists in each department There are a number of types of products that a business can offer: Consumer goods o Durable goods that are kept for a number of years o Non-‐durable goods that are only kept in the short term Capital or Producer goods Services Goods are tangible and visible, whilst services are intangible and cannot be seen. Capital or producer goods are provided to another business, whilst consumer goods are provided directly to households to be used.
This is when a product increases in value through the processes, allowing the business to sell it at a higher price than production costs. This is found by subtracting the costs from the selling price. This can happen for a number of reasons: Speed or quality of service Prestige Feel-‐good factor Perceived value-‐for-‐money Quality of the finished product Brand image and loyalty Taste and design Inability to obtain products cheaper elsewhere
This is the best alternative decision that is forgone when a decision is made. Whenever there are two choices to a decision, then it will incur an...