4.3 Capacity Utilisation and Outsourcing Flashcards

Front

Capacity

Back

measures the maximum amount of output a

firm can produce at a given moment with its existing resources.

Front

Factors of production

Back

are inputs into the transformational

process of business, such as land, labour, capital and enterprise.

Front

Capacity utilisation

Back

measures the existing output relative

to the maximum possible output.

Front

Capacity under-utilisation

Back

occurs when a business is

producing less than the maximum amount it can produce, given its existing resources.

Front

Rationalisation

Back

occurs when a business reduces the scale

of its operations and reduces its capacity level.

Front

Subcontracting

Back

occurs when one business employs

another business to undertake some of the work.

Front

Outsourcing

Back

occurs when the business uses other

producers to undertake some of its operations.