Calculation of Operations Data (AQA A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
Capacity
Capacity
Maximum production level a business can achieve at full output
Capacity utilisation
Capacity utilisation
% of production potential actually being used
Formula: Capacity utilisation
Formula: Capacity utilisation
(Actual output / Max output) × 100
Labour productivity
Labour productivity
Average output per worker in a time period
Formula: Labour productivity
Formula: Labour productivity
Output per time period / Number of employees
Unit cost
Unit cost
Cost of producing one single unit of output
Formula: Unit cost
Formula: Unit cost
Total cost / Units of output
Higher capacity utilisation → effect on unit costs
Higher capacity utilisation → effect on unit costs
Unit costs fall (fixed costs spread over more units)
Higher capacity utilisation → effect on labour productivity
Higher capacity utilisation → effect on labour productivity
Labour productivity rises (same workers, more output)
Fewer employees, same output → effect on productivity
Fewer employees, same output → effect on productivity
Productivity increases (each worker produces more)