Business Studies Prelim Notes
Business Studies notes…
Topic 1- Nature Of Business
The importance of businesses
The function of business in creating value/benefit ← A business is an organization that buys and sells goods, makes products or provides services. ← Business enterprises undertake many activities to provide the products demanded by customers, however, the most important activity is production. ← The management of the business, organizes all aspects of running the business including choosing a particular product or service
Production ← Refers to those activities undertaken by the business that combine the resources to create products that satisfy customer needs and wants. ← All products are made from a combination of the following three ingredients: ← National Resources (raw materials) ← Capital Resources (machinery and technology) ← Labour Resources (human skill and effort)
Adding Value through production
Value Chain- the concept that value is added through each stage of the production process, as inputs are transferred into final products (output)
Value is added during the production of a loaf of bread: ← The productive activity was: ← Production of wheat on farm ← Production of bread at bakery ← Production of delivery services by drivers ← The product (output) of one business becomes the raw material (input) by another business is referred to as intermediate products. ← Businesses are interdependent as one relies on another for further manufacturing of the product and after distribution. ← As the raw materials move along the various stages of production, extra value is created- a process known as value adding. ← The production process creates the value chain ← The value of production is the total value added by a producer, measured in dollar terms: ← Value of production=Value of sales-Value of intermediate products ← The value added to the product is the difference between the cost of the raw materials and the amount received from
Topic 1- Nature Of Business
The importance of businesses
The function of business in creating value/benefit ← A business is an organization that buys and sells goods, makes products or provides services. ← Business enterprises undertake many activities to provide the products demanded by customers, however, the most important activity is production. ← The management of the business, organizes all aspects of running the business including choosing a particular product or service
Production ← Refers to those activities undertaken by the business that combine the resources to create products that satisfy customer needs and wants. ← All products are made from a combination of the following three ingredients: ← National Resources (raw materials) ← Capital Resources (machinery and technology) ← Labour Resources (human skill and effort)
Adding Value through production
Value Chain- the concept that value is added through each stage of the production process, as inputs are transferred into final products (output)
Value is added during the production of a loaf of bread: ← The productive activity was: ← Production of wheat on farm ← Production of bread at bakery ← Production of delivery services by drivers ← The product (output) of one business becomes the raw material (input) by another business is referred to as intermediate products. ← Businesses are interdependent as one relies on another for further manufacturing of the product and after distribution. ← As the raw materials move along the various stages of production, extra value is created- a process known as value adding. ← The production process creates the value chain ← The value of production is the total value added by a producer, measured in dollar terms: ← Value of production=Value of sales-Value of intermediate products ← The value added to the product is the difference between the cost of the raw materials and the amount received from