Mrs Iwanczyk is on a Field trip She worked in the Telecomms industry for 10 years before becoming a teacher. She has worked for a start-up business and a multinational

Overview of Business Studies Importance of the context of business in relation to decision making Interrelated nature of business activities and how they affect competitiveness Competitive environment and the markets in which businesses operate Influences on functional decisions & plans including ethical & environmental issues Factors that might determine whether a decision is successful eg the quality of data and the degree of uncertainty how technology is changing the way decisions are made & how businesses operate & compete Impact on stakeholders of functional decisions & their response to such decisions Non-quantitative & quantitative data in decision making (interpretation of index numbers and calculations such as ratios and percentages). Study of strategic decision making should build on the study of decision making in the functional areas. Impact of technology on strategic decision making Influences of Corporate Social Responsibility, ethical and environmental issues on strategic decisions Difficulties in forecasting future trends Importance of assessing feasibility and risk when making strategic decisions Impact on stakeholders of strategic decisions and their response to such decisions.

Introduction to Business Studies (topics) Unit 1 What is business? Unit 2 Managers, leadership and decision making Unit 3 Decision making to improve marketing performance Unit 4 Decision making to improve operational performance Unit 5 Decision making to improve financial performance Unit 6 Decision making to improve human resource performance Unit 7 Analysing the strategic position of a business (A-level) Unit 8 Choosing strategic direction (A-level) Unit 9 Strategic methods: how to pursue strategies (A-level) Unit 10 Managing strategic change (A-level)

Overview of Economics Students should appreciate that microeconomics & macroeconomics are not entirely distinct areas of study. Microeconomic principles often provide fundamental insights into understanding aspects of the macroeconomy. Similarly, economic issues and problems often contain both a microeconomic and macroeconomic dimension. Students will be expected to acquire competence in quantitative skills that are relevant and be familiar with the various types of statistical and other data which are commonly used by economists. They should be able to make relevant calculations from economic data and be able to interpret data presented in the form of index numbers. Examples of other relevant quantitative skills include: the construction and use of graphs and the application of statistical measures such as the mean, median and relevant quantiles. Opportunity to explore the disagreements that exist between economists and current economic controversies. During their course of study, they should come to appreciate why such disagreements exist and the basis upon which judgements are made. Students must use both quantitative and qualitative evidence to evaluate arguments and to support judgements relating to economic issues and problems. Students should be encouraged to develop a critical approach to economic models and methods of enquiry. They should appreciate that value judgements play an important role in economic decision making. They should understand the methodology of economics and the role of evidence whilst recognising that economics is a social science and that people’s behaviour is not necessarily rational or predictable. It is expected that students will acquire a good knowledge of trends and developments in the economy which have taken place over the past fifteen years and also have an awareness of earlier events where this helps to give recent developments a longer term perspective.

Introduction to Economics (topics) The operation of markets and market failure Economic methodology and the economic problem Price determination in a competitive market, Production, costs and revenue, Competitive and concentrated markets, The market mechanism, market failure & government intervention in markets The national economy in a global context The measurement of macroeconomic performance, How the macroeconomy works : the circular flow of income, AD/AS analysis and related concepts, Economic performance and Macroeconomic policy Individuals, firms, markets and market failure Individual economic decision making, Perfect competition, imperfectly competitive markets and monopoly, The labour market, The distribution of income and wealth: poverty and inequality, The national and international economy Financial markets and monetary policy, Fiscal policy and supply-side policies, The international economy

Objectives To calculate operational indices To evaluate operational decision- making using operational indices

Analysing Operational Performance The operations function of a business is the "engine-room" of the business, and like all engines, performance can and should be measured. Calculation of operational data Labour productivity Unit costs Capacity utilisation Interpret operational data & use it to make operational decisions

Overview of key concepts Firms have to be as efficient as possible otherwise they risk wasting money & resources (so control costs when mking goods or services) Being efficient should lower costs & thereby raise profit margins Opns mgrs use key measures to calculate their efficiency rates for labour, machinery & how much it costs to make each unit

Analysing operational performance Labour productivity Unit costs Capacity utilisation

Labour productivity The amount (volume) of output that is obtained from each employee Quick calc: Output in a given month is 20 000 units 40 people are employed Labour productivity is: 500 units per worker

Analysing operational performance Labour productivity Unit costs Capacity utilisation

Unit costs In order to be competitive, a firm will try to reduce the cost of each unit that it produces The cost of producing 1 unit of output Fixed costs (FC) = costs that do not change no matter how many units you make Variable costs (VC) = costs that change when output changes Which are fixed costs? Which are variable costs? Rent, raw materials, insurance Rent (FC), raw materials (VC), insurance (FC) Unit costs are sometime known as average cost (AC) or average total cost (ATC)

Unit costs Complete this table:

Which firm is most? Least efficient? Units of output Fixed costs (£) Variable costs (£) Total costs (£) Unit costs (£) A 40 200 160 360 9.00 B 80 300 600 7.5 C 100 500 1100 11.00 D 150 675 1275 8.5

Complete this table What is the link between labour productivity & wage costs per unit? Higher the productivity, the lower the wage costs per unit Which firm has the highest labour productivity & lowest labour costs per unit? W Which firm has the lowest labour productivity & highest labour costs per unit? Y

Calculate labour productivity 5000 units are made a month Monthly labour hours are 1,250 0.25hours per units

Analysing operational performance Labour productivity Unit costs Capacity utilisation

Capacity utilisation Def: % of a firm’s total poss production level that is being reached Eg 95% capacity utilisation for a machine that can make 100 units means that it is making 95 units out of a possible 100 every day

Capacity utilisation So what is the capacity of a firm capable of producing 40,000 units, but is producing 32,000 80% How many units does it need to increase per day to be at maximum capacity? 20% (8000 units) This is known as spare capacity

Complete this table: Level of output (units) Capacity utilisation (%) Fixed Costs (£) Fixed costs per unit (£) 10,000 100 120,000 12.00 9,000 90 13.33 8,000 80 15.00 7,000 70 17.14 6,000 60 20.00 5,000 50 24.00 4,000 40 30.00 3,000 30 40.00 2,000 20 60.00 1,000 10 120.00

Complete the table Which business has the best capacity utilisation? Capacity output per year Maximum possible output Capacity utilisation Company A 5,000 4,000 80.0% Company B 6,000 5,500 91.6% Company C 3,500 2,500 71.4% Company D 2,250 90.0%

Ice Delights Complete all activities