Unit 13

Question 1

Define profit

Answer 1

Amount of money a company receives minus manufacturing costs

Question 2

Give 5 types of people who could be astakeholder

Answer 2

Employees, shareholders, customers, suppliers, distributers, wider society, managers

Question 3

Define what dividends are

Answer 3

Money paid to shareholders

Question 4

Define capital

Answer 4

Amount of money invested in a company for equipment or stock

Question 5

Give the three key concepts of researching the market

Answer 5

Market research
Customer loyalty
Innovation

Question 6

What is the difference between turnover and profit?

Answer 6

Turnover = amount of money from sales
Profit = amount of money received minus manufacturing costs

Question 7

Give examples of different types of running costs

Answer 7

Raw materials, wages, overheads, sales, tools, machinery

Question 8

Give examples of what profit can be used for?

Answer 8

Capital, innovation, dividend, bonuses, investment

Question 9

An engineering company has various customers, list the three types of customers a company could get

Answer 9

Regional (local)
National
International

Question 10

Give the three factors engineering organisations need to balance in their activities

Answer 10

Quality
Cost
Time

Question 11

Give examples on how quality, cost and time factors link with each other

Answer 11

High quality product is often more expensive
Cheaper product can be made quicker but with a lower quality

Question 12

Define efficiency, in business

Answer 12

Peak level of performance, least amount of input for highest amount of output

Question 13

List some benefits of an efficient system

Answer 13

Reduction in costs, increased profit
Reduces carbon footprint and materials
Increased reputation

Question 14

Why would a company invest in R&D?

Answer 14

Competition
New technology or materials
New regulations
Increase in price
Materials or components no longer available

Question 15

Give the three types of innovation

Answer 15

Technological
Business model
Process

Question 16

Identify the three parties involved and what they refer to in a contract

Answer 16

First party - supplier
Second party - customer
Third party - anyone else

Question 17

Define tendering

Answer 17

A process for generating offers from suppliers

Question 18

What requirements does the tendering process need to be?

Answer 18

Fair
Ethical
Legal (Under the Bribery Act 2010)

Question 19

Define what a contract is

Answer 19

A written agreement between a company or individual

Question 20

What are clauses in a contract?

Answer 20

Small paragraphs

Question 21

Define a warranty

Answer 21

An assurance that a statement is true or a promise that something will happen

Question 22

What is force majeure?

Answer 22

An unforeseeable circumstance (act of God) such as a war or natural disaster.

Question 23

What are indemnities?

Answer 23

Protection against loss or blame

Question 24

Define liability

Answer 24

The state of being legally responsible for something

Question 24

Define **management**

Answer 24

The task of planning, leading, organising and controlling people/resources to achieve goals effectively

Question 25

What characteristics does an **agile** management system have?

Answer 25

Flexibility in a flat structure, fewer managers in hierarchy Customer collaboration Work process responds to change Regular meetings for adjustments

Question 26

What are the four key management activities?

Answer 26

Planning Resource allocation Training and development Staffing

Question 27

What are the four types of resources?

Answer 27

Physical - buildings, Intellectual - customer data, Human - employees, Financial - cash

Question 28

List the differences between **permanent** staff and **contract** staff

Answer 28

Permanent - given salary and entitled to benefits Contract - temporarily employed, have some protection but not all benefits

Question 29

**Contract engineers** are ____ ______ ____ but do not get _________.

Answer 29

Very highly paid but do not get benefits.

Question 30

Why is training important?

Answer 30

Improves safety Ensures compliance with the law Motivates staff Develops existing staff Improves staff retention

Question 31

Why do companies use management software to improve business processes?

Answer 31

Reduces need for staff, saves money Assists large businesses in automating process, saves time and money

Question 32

What is a**performance review**?

Answer 32

Assesses staff on how they are meeting their goals to show they are working as well as they can

Question 33

What is a **policy**?

Answer 33

Describes how employer/employee should make decisions in a particular situation

Question 34

Give the three areas of **financial responsibility**

Answer 34

Financial planning Financial controls Financial reporting

Question 35

Define a **transaction**

Answer 35

Refers to an instance where money changes hands

Question 36

Give the 3 different sources of finance

Answer 36

Loans Shares Capital

Question 37

Give the difference between **direct** and **indirect** costs

Answer 37

Direct - any cost related to production method of a good or service Indirect - any cost not directly associated with one item or activity

Question 38

What are **overhead** costs and give an example?

Answer 38

Any cost associated with operating a business, ex. stocking the snack machine, rent, electricity

Question 39

Define **revenue**

Answer 39

Total income of a company

Question 40

What is a **creditor** and a **debtor**?

Answer 40

Creditor - someone whom you owe money to Debtor - someone who owes you money

Question 41

Define **cash flow**

Answer 41

Amount of money moving through a company at a given time

Question 42

Define what a **profit and loss (P&L)** statement states?

Answer 42

Revenue against costs and expenses for a certain length of time

Question 43

What is the formula for working capital and solvency?

Answer 43

Working capital = current assets - current liabilities

Question 44

What is **insolvency?**

Answer 44

A state in which a person or business is unable to pay their debts

Question 45

List the different types of taxes a business or employee needs to pay

Answer 45

Corporation tax Value-added tax (VAT) National insurance (deducted from the employee)