KAP 5 Revision

Outsourcing is...

• accepting orders to produce for others when your demand is low

• involves returning production or operations to the host country that had previously been moved

• the delegation of one or more business processes to an external provider

• having a flexible workforce

What is capacity utilisation

• Measures the output it can produce given its existing resources.

• Describes how much of its capacity is being used at a given time in a a business to measure efficiency.

• Measures the maximum it can produce given its existing resources.

• Describes the costs of producing a single unit

Labour productivity measures the amount of output that is obtained from each

What is the main factor The Body Shop might consider when choosing suppliers?

• Dependability of suppliers

• Ethical considerations

• Capacity

• Cost

A car manufacturing company has a capacity utilisation of 93%, what 2 solutions could they do to improve this?

• Invest in new machinery

• Decrease prices

• Improve quality

• Increase prices