Glossary

Assets

The possessions of a business that contribute to the value of the business.

Batch production

A method of production in which a number of items are processed at the same time.

Business

An organization that buys in goods and services which are then used to produce different goods and service to be at a profit.

Capital

The total stock of wealth (as opposed to income) owned by a business.

Cash flow

the money that flows into and out of a business over a given period of time. A projected cash flow for a future period is known as a cash flow forecast/flow budget.

Customer

The purchaser of the goods and services produced by a business.

Economies of scale

A situation in which an increase in the scale at which a business operates will lead to a reduction in unit cost.

Efficiency

A ratio of the input of an operation or process to the output.

Enterprise

The ability to see a market opportunity combined with the willingness to accept risk in order to exploit it.

Flow production

A method of production organization in which the work moves from one work station to another as each process is completed.

Industrial inertia

The term used to describe the reluctance of business organizations to relocate.

Job production

A method of production organization in which a single product is made from start to finish by one person or a group of people.

Lead time

The elapsing between the placing of an order for stocks and delivery.

Profit

The surplus generated by business activity.

Profit and loss account

Accounting statement showing the profit a business has made over a given period of time and the way it has been used.

Trade union

An organization representing a group of employees in matters of pay and other conditions of employment.