1. 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

2. 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.

3. 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)

4. 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.

5. 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

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

7. 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

8. 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

9. Analysing operational performance
Labour productivity
Unit costs
Capacity utilisation

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

11. Analysing operational performance
Labour productivity
Unit costs
Capacity utilisation

12. 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)

13. Unit costs
Complete this table:

14. 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

15. 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

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

17. Analysing operational performance
Labour productivity
Unit costs
Capacity utilisation

18. 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

19. 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

20. 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

21. 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%

22. Ice Delights
Complete all activities