Academiaa collective term referring to the community of teachers and students in higher education. |
Higher Educationthe process of engaging in learning at an advanced level.
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Intellectual Skillsthe way you think about things, approach them and process the information.
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Learning Stylethe particular way in which you gather and perceive information and the process and organise it.
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Reflectionthinking back on how you have thought about something. |
Skillthe ability to do something well.
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Academic LiteracyAcademic literacy is the ability to write and read about academic subjects. The ability to gather information, process information and understand the information in a post-secondary education environment The skills of academic literacy can be applied in the classroom, assignments and exams. The goal is to equip students with the ability to summarize, compare, contrast, create ideas and analyse information from a wide variety of sources.
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Academic Essayan extensive piece written around a specific
academic concept |
Brainstormingan organised process
of a group offering their own ideas, usually aimed at solving a problem |
Citethe mention of the
author’s name from whose work you obtained the idea as well as the date of the publication |
Draftthe first, rough
attempt at writing something |
Processa collective term
referring to the logical sequence of steps to achieve an objective |
SynthesisThe bringing together of the different strands
of an argument into a cohesive whole |
Denotationthe literal meaning of a
word or name. Although Paris might make you think of romance, its denotation is simply the city of an old
tribe called the Parisii |
Connotationswords which are used for their subtext rather than their literal meaning:
your manager may dislike being called “boss” because of the negative meaning
associated with the word |
ContextThe background to something you do. |
HomophoneWords which sound the same but have different spelling and different meanings, e.g. flour: flower. |
PrefixThe first part of a combined word, e.g. un- as in unhappy. |
Personal SellingVan Heerden and Drotsky (2018) define personal selling as the exchange of ideas or information, verbally or non-verbally between the customer and the salesperson. Furthermore, the aim of communication in personal selling is to inform the customer and persuade them to purchase a product or service. Personal selling takes place directly with the customer through face-to-face communication, therefore, it can be seen as a two-way transaction between the salesperson and the customers. |
Marketing ConceptVan Heerden and Drotsky (2018) highlight that the marketing concept is a philosophy and a way of doing business that is based upon consumer demand. It is driven by what consumers want and need, and then products are developed and sold in order to satisfy these demands. |
Customer OrientationCustomer orientation stage, where the company conducts applied research through utilising various methods such as focus groups, and the internet to determine what the needs of the consumers are, thereafter produce products to satisfy those needs. |
Marketing Communications MixThe integrated communications mix has seven elements: Advertising refers to any paid- for, non- personal communication about a product or service. Direct marketing occurs when the organisation communicates directly with the customer to get a response. The internet is used for direct interactive communication with the customer.
Sales promotion is marketing activities that provide extra incentives to the salesforce, the distributors or the consumer, it aims to be to stimulate an immediate response. Publicity is non-personal information about the organisation, although the organisation will probably spend money on it, and it is carried out by an identifiable sponsor. Public relations aim to change customer attitude, and garner understanding and acceptance from the public. Personal selling is face-to-face selling to inform or persuade the customer to purchase the product or service. |
FAB MethodFAB stands for : Feature, Advantage and Benefit. Features refer to the physical characteristics of the product, such as the size, shape and colour. Advantages refer to the performance characteristics of the product, such as that a cell phone can receive emails. Benefits refer to the favourable result that the buyer obtains from using the product, such as the cell phone providing the user with the freedom of receiving emails at home and not needing to be in the office at all times. |
Sell SequenceThe SELL sequence is a selling technique that helps the salesperson to stress product benefits that would satisfy the needs (wants) of the customer. |
Decision-makingThe process or action of making a decision, it involves identifying alternatives and then choosing the course of action. |
High Involvement – Low InvolvementWith high involvement consumers go through a extensive process of consideration before making a decision, low involvement the cosumer risk is low as the product or service is inexpensive - this makes the dicision to purchase easier. |
Maslow’s Hierarchy of Needs ModelA useful way to understand consumers’ motives is to use Maslow’s hierarchy of needs model. This hierarchy of needs is a psychological theory created by Abraham Maslow in his 1943 paper "A therory of human motivation" it explores the reasons why people make the desisions they make. |
CommunicationCommunication is any form of exhanging information by speaking and writing or any other methods. It is sharing information. |
ListeningWhen you listen you give your attention to something that is being said. |
PersuadeTo convince someone of your argument or reasoning. |
VerbalCommunication through spoken words. |
Non-verbalNon-verbal communication is all forms of communication without words. It includes apparent behaviours such as facial expressions, eyes, touching, and tone of voice. It also includes less obvious messages such as one’s clothes (dress code), posture, and the spatial distance between two or more people. |
GoalsGoals reflect personal ambitions and wants, and to succeed, goals need to be formally set. In short, goals are highlighting what a salesperson wants to achieve, and how they will do so. |
Time Management Good time management enables you to work smarter – not harder – so that you get more done in less time, even when time is tight and pressures are high. It is a process of planning how you will spend your time per task. |
TechnologyApplication of scientific knowledge to the workplace or everyday life. Technology aids us in completing tasks and storing data more effectively and to analise data. Software applications are technology tools that aid us in everyday life as well as the working environment. |
ProspectingProspecting is the process of searching for new clients/customers. |
Planning the Sales CallPlanning the sales call is often referred to as the pre-approach and is a set of tasks that the salesperson has to perform before actually meeting the prospect for the first meeting. |
Approach and Sales Presentation MethodsThe sales approach and presentation techniques are vital not only to the success of the sale, but to building long-term relationships with customers. The sales approach starts when the salesperson first comes into contact with the buyer, when the actual discussion about the product or service begins. The sales presentation is when the salesperson uses an actual presentation, which could be by speaking or by using visual demonstrations to highlight how the product or service will be of benefit to the customer. The goal of the sales presentation is to sell the product or service to the prospect. |
Handling ObjectionsObjections are when someone says no or disagrees with your point of view. Handling objections is the process of dealing with objections to resolve the issues identified. |
Closing the SaleThe art of closing a sale has many salespeople believing that if they master the art of closing a sale, they will be known as the best salesperson. Closing, however, is not one technique that is used at the end of the sale. The process of closing starts the moment the salesperson meets the customer. Technically, ‘closing’ a sale takes place when products or services are delivered to the customer’s satisfaction and payments are received. Van Heerden and Drotsky (2018) define closing as ‘taking the order’. |
Follow UpThe salesperson’s work is certainly not over after the order has been placed. Selling is about building long-term relationship and ensuring that continual sales are ensured. Following up is thus crucial to this relationship. To follow up with a customer you need to follow steps for example checking the order and thanking the customer. |
Sales ForceA Sales Force is a group or division of a business responsible for the selling of the business's products or services. |
LeadershipLeadership is leading a group of people, leading is about motivating a group of people to achieve common goals. |
CompensationCompensation is more than money! There is a hugely positive effect when salespeople have their success behaviour rewarded. The design and implementation of effective sales reward systems are, therefore, vital to the success of a sales force. |
EvaluationFor an organisation to stay competitive, it is necessary for salespeople to reach business and personal goals. The sales manager’s role is thus to lead and motivate his or her sales team to perform and at the end of each performance period, the manager must evaluate their performance. In this regard, performance evaluation is understood as a formal, structured (face to face) system of measuring and evaluating a salesperson’s activities and performance. |
Customer RelationshipsThe development of an ongoing connection between a company and its customers. |
Customer PowerThe change within the business environment that is having the most dramatic impact on the development of KAM is the new-found expertise and power of customers and consumers in exercising choice. Customer empowerment is not just a cultural change due to companies being more customer focused, it is a consequence of mature markets, and as a result of technology. Consumers today are extremely knowledgeable and make very informed buying decisions. |
GlobalisationThe process by which businesses or other organizations develop international influence or start operating on an international scale. |
Process RefinementRefinements are small changes or additions that you make to something in order to improve it. Refinement is the process of making refinements. |
Selection CriteriaSelection criteria is a principle or standard (criteria) by which something may be judged or decided. It is how you choose something like customers, suppliers or staff memebers. |
Customer ExitsPart of managing a key account is the ability to know when to adopt, and similarly when to retire an account. A company with an unmanageable portfolio, since inappropriate customers have not been cleaned out, simply drains company resources, and ultimately profitability. There are two options for customers who should leave the portfolio: they should either be exited to customer tier below, or they should be completely exited, and their business lost to the supplier. When the choice to exit the customer to the below tier is done, the customer could be carefully and slowly withdrawn from company resources, as not to notice the change in key account status. |
Resource AllocatingThis is the process of assigning resources to a task, client etc. |
Relationship StagesKAM is concerned with managing the relationship with the customer, with the goal being business development, and making profit for the company. Hence, it is important to understand these relationships, and to understand the hierarchy of different relationship levels. Relationship stages refere to the level of the relationship; Basic Cooperative, interdependent or integrated. |
Key RelationshipsImportant relationship. |
Relationship HierarchyRelationship hierarchy is the levels of a relationship, it is a system in which members of the relatioship is ranked according to relative status or authority. |
Exploratory RelationshipThe exploratory stage is the earliest stage of relationship development before trading begins. Woodburn and McDonald (2011) describe it as the investigation and development or understanding stage, where the potential of importance of the relationship qualifies the customer as a future key account. |
Integrated RelationshipIn an integrated relationship the two parties come together to operate as a single entity, while maintaining their separate identities, to create value over and above what either could achieve individually. |
Interdependent RelationshipAs explained by Woodburn and McDonald (2011), in an interdependent level the organisations collaborate across a range of functions. Interactions are orchestrated and managed by a key accounts manager whose role is to manage the relationship, and ensure that nothing discredits the partnership. |
Cooperative RelationshipThe cooperative relationship is more of a network, although it a loose one. More people in the supplier’s organisation are getting involved with the customer, not only the key accounts manager. |
Basic RelationshipAt the basic stage, neither party feels particularly committed to the relationship. The business is based on a simple exchange of money for goods and services supplied. There is no extra value received or perceived by the buyer, and the supplier is aware of this. |
Customer DriversThe three primary drivers of customer satisfaction are: Response time — the time it takes for the customer to get a response from a qualified person (i.e., someone who is going to attempt to resolve the issue). Resolve time — the time it takes for the customer to get the issue resolved to their satisfaction. |
Cost ReductionCost reduction is a planned positive approach to reduce expenditure. |
Risk ReductionRisk reduction is a planned positive approach to reduce risks. |
Strategy IndependenceIndependent Strategy adds value to its clients by seeking out investment themes and opportunities, often challenging conventional wisdom. |
Strategy Direction MatrixPlanning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future growth and making decisions. |
Supply ChainWhatls. (n.d) defines a supply chain as: “a network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, through to its eventual delivery to the end user. |
Supply Chain IntegrationSupply chain integration is a concept that has been around since 1989, and the simple definition according to supply chain opz is, “how everyone in the company, and its trading partners work in sync to achieve the same business objectives via integrated business process and information sharing”. |
Competitive AdvantageCompetitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals. These factors allow the productive entity to generate more sales or superior margins compared to its market rivals. |
Customer RetentionCustomer retention is a company's ability to retain its customers over time |
Cash FlowThe total amount of money being transferred into and out of a business, especially as affecting liquidity. |
Lifetime ValueIn marketing, customer lifetime value, lifetime customer value, or life-time value is a prediction of the net profit attributed to the entire future relationship with a customer. |
Market SegmentationMarket segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations. |
Industry Driving ForcesIndustry conditions change because important forces are driving industry participants (competitor, customer, or suppliers) to alter their actions; the driving forces in an industry are the major underlying causes of changing industry and competitive conditions |
PEST AnalysisPEST Analysis is a measurement tool which is used to assess markets for a particular product or a business at a given time frame. PEST stands for Political, Economic, Social, and Technological factors. Once these factors are analysed organisations can take better business decisions. |
External AuditAn external auditor performs an audit, in accordance with specific laws or rules, of the financial statements of a company, government entity, other legal entity, or organization, and is independent of the entity being audited. |
Internal AuditInternal auditing is an independent, objective assurance and consulting activity designed to add value to and improve an organization's operations. |
Strategic Marketing PlanMarketing strategy is a long-term, forward-looking approach and an overall game plan of any organization or any business with the fundamental goal of achieving a sustainable competitive advantage by understanding the needs and want of customers. |
Tactical Marketing PlanA tactical marketing plan breaks down those business goals into marketing objectives, then details the marketing strategies and tactics that will be used to achieve those objectives |
Key Account PlanCoordination and planning of activities for complex accounts. |
ProcessesA series of actions or steps taken in order to achieve a particular end. |
Organisational LearningOrganizational learning is the process by which an organization improves itself over time through gaining experience and using that experience to create knowledge. The knowledge created is then transferred within the organization. |
Implementation RolesDeciding what should happen in an account and making sure it is delivered, making appropriate strategies and plans, having a deep understanding of the customer Implementation Roles, Expert in the customer, Value developer,Point of accountability |
Facilitation RolesThe facilitation role takes a decision or plan into effect; execution - make it happen. |
Reward SchemesReward system refers to all the monetary, non-monetary and psychological payments that an organisation provides for its employees in exchange for the work they perform. |
RewardsA thing given in recognition of service, effort, or achievement. |
MotivatorsSomething that provides a reason or stimulus to do something. |
Capital GoodsCapital goods are goods used in the production of consumer goods, example machinery. |
Ceteris ParibusCeteris paribus is a Latin term which means “all other things being equal” |
ChoiceChoice exists in every decision made in the economy and refers to accepting one option over another. |
Consumer GoodsConsumer goods are goods purchased by households, example bread. |
Direct RelationshipDirect (positive) relationship shows two variables which are causally linked increasing or decreasing simultaneously. |
Durable GoodsDurable goods are goods that can be used repeatedly, example furniture. |
Economic GoodsEconomic goods are goods that fetch a price. |
Economic GrowthEconomic growth refers to an expansion in the productive economy. |
EquilibriumEquilibrium is a state of balance when opposing forces are balanced and there is no incentive for change. |
Final GoodsFinal goods are bought by the end user or household, example shoes. |
GraphGraph is a visual representation of the relationship between two or more variables. |
Heterogeneous GoodsHeterogeneous goods are different in the eyes of the end user. |
Homogeneous GoodsHomogeneous goods are exactly the same in the eyes of the end user. |
Intermediate GoodsIntermediate goods are inputs into the production of final goods, example nuts and screws. |
Inverse RelationshipInverse (negative) relationship shows two variables which are causally linked increasing or decreasing in opposite directions. |
MacroeconomicsMacroeconomics is the study of global or national aggregates, example inflation. |
MeansMeans are resources or inputs used in the production process, example natural resources. |
MicroeconomicsMicroeconomics is the study of individual entities in the economy, example a firm. |
NeedsNeeds are goods and services people cannot do without, example water. |
Non-durable GoodsNon-durable goods are goods that have a single use, example food. |
Normative SciencesNormative sciences are sciences based on subjective opinion, example politics. |
Opportunity CostOpportunity cost is the cost of the next best alternative given up, or not chosen. |
Positive SciencesPositive sciences are sciences based on objective fact, example chemistry. |
Production Possibilities CurveProduction possibilities curve is a graphical representation of the maximum possible production possibilities of a community or country. |
Public GoodsPublic goods are provided by the government for everyone to use, example parks. |
ResourcesResources are means or inputs used in the production process, example human resources. |
ScheduleSchedule is a table. |
Semi-durable GoodsSemi-durable goods are goods that can be used repeatedly for a short period of time, example sports equipment. |
ServicesServices are non-tangible actions, example haircuts. |
Social ScienceSocial science is a science that examines humans in the environment, example psychology. |
WantsWants are nice-to-haves but are not necessary for survival, example holidays. |
CapitalCapital refers to goods / equipment used in the production of other goods, example machinery. |
Capital FormationCapital formation is the process of investing in capital equipment. |
Capital Intensive ProductionCapital intensive production refers to companies that use more capital equipment than labour, example automation. |
Circular FlowCircular flow refers to the flow of money between households and firms in one direction and the flow of goods and services in the opposite direction. |
Consumer SpendingConsumer spending refers to the spending by households. |
Division of LabourDivision of labour is when workers are divided into tasks as part of a continual production process according to their skills, example a labourer who works on a production line. |
EntrepreneurshipEntrepreneurship refers to the skill that people who open and own a business possess. The act of opening a business. |
ExportsExports refer to goods that are sold outside a country’s borders. |
Factor MarketFactor market is a market where factors of production are traded, example the labour market. |
Factors of ProductionFactors of production refer to the resources needed to carry out production, example labour. |
Financial SectorFinancial sector refers to intermediaries through which funds are channelled from surplus units to deficit units, example banks. |
FirmsFirms refer to all forms of business ownership, including informal businesses. |
FlowFlow is a variable that has time dimension, i.e. it occurs over a period of time. |
Foreign SectorForeign sector refers to all countries, businesses and people outside the national border. |
Goods MarketGoods market is a market where goods and services are traded. |
GovernmentGovernment refers to all levels of government, from local councils to national government as well as all state owned enterprises. |
Government ExpenditureGovernment expenditure refers to spending by all levels of government. |
HouseholdHousehold is a collection of one or more consumers that live together. |
Human CapitalHuman capital refers to the quality of labour, i.e. skills levels. |
Human ResourcesHuman resources refer to the quality and quantity of labour. |
ImportsImports are goods and services that flow into the country from beyond the national borders. |
IncomeIncome as a micro concept refers to earnings for the factors of production. |
InjectionInjection refers to money that enters the circular flow. |
InterestInterest is payment for capital, example lease payments for machinery. |
InvestmentInvestment refers to the buying of capital goods needed for production, example machinery. |
Labour Intensive ProductionLabour intensive production refers to companies that use more labour than capital equipment during the production process. |
LeakageLeakage refers to money that leaves the circular flow. |
Macroeconomic ObjectivesMacroeconomic objectives serve as criteria for judging the performance of an economy. |
MoneyMoney is the lubricant for earnings and spending. Money is not a resource. |
Natural ResourcesNatural resources are the gifts of nature used in the production process, example land. |
ProductionProduction using inputs to make outputs. The act of making things for resale. |
ProfitProfit is income minus expenditures. |
Public SectorPublic sector refers to all levels of government, from local councils to national government as well as all state owned enterprises. |
RentRent is payment for natural resources, example land. |
SpecialisationSpecialisation refers to being successful and skilled in an area of business, example an accountant. |
SpendingSpending refers to buying goods and services. |
StockStock is a measure that has no time dimension, example the amount of money in your wallet right now. |
Transfer PaymentsTransfer payments are one way money flows from the government, example child grants. |
Wages and SalariesWages and salaries are payments for the use of labour in the production process. |
Change in DemandChange in demand refers to a change in every quantity demand at every price, i.e. a shift of the demand curve. |
Change in Quantity DemandedChange in quantity demanded refers to a change in the number of items demanded because of a change in price. |
ComplementsComplements are products that can be used together, example bread and peanut butter. |
DemandDemand refers to all goods the consumer is able and willing to pay for. |
Demand CurveDemand curve is a graphical representation of a consumer showing the relationship between price and quantity of a given item. |
Demand ScheduleDemand schedule is a table representation of a consumer showing the relationship between price and quantity of a given item. |
DisequilibriumDisequilibrium refers to all prices and related quantities above and below equilibrium. |
ExcessDemandExcess demand when a greater number of goods are demanded than are being supplied. |
Excess SupplyExcess supply when a greater number of goods are supplied than are being demanded. |
Individual DemandIndividual demand refers to the quantities of a product an individual household is willing and able to buy at each price level. |
Individual SupplyIndividual supply refers to the quantities of a product an individual company is willing and able to produce at each price level. |
Inferior GoodsInferior goods are goods that decrease in demand with an increase in income. |
Law of DemandLaw of demand states that; as prices rise, quantity demand falls and as prices fall, quantity demanded rises. |
Law of SupplyLaw of supply states that; as prices rise, quantity supplied rises and as prices fall, quantity supplied falls too. |
Market DemandMarket demand refers to the quantities of a product all individual households collectively are willing and able to buy at each price level. |
Market SupplyMarket supply refers to the quantities of a product all individual firms collectively are willing and able to produce at each price level. |
Movement Along a Demand CurveMovement along a demand curve refers to moving from one point on a demand curve to another point on the same demand curve. |
Movement Along Supply CurveMovement along supply curve refers to moving from one point on a supply curve to another point on the same supply curve. |
Normal GoodsNormal goods are goods that increase in demand with an increase in income. |
Relative PricesRelative prices are prices expressed in term of another, example the price of coffee is double the price of tea. |
Shift of the Demand CurveShift of the demand curve refers to moving an entire demand curve to a new position. |
Shift of the Supply CurveShift of the supply curve refers to moving an entire supply curve to a new position. |
SubstitutesSubstitutes are products that can be used instead of an existing product, example brown bread and white bread. |
SupplySupply refers to all goods the company is able and willing to produce. |
Supply CurveSupply curve is a graphical representation of a firm / firms showing the relationship between price and quantity of a given item. |
Supply ScheduleSupply schedule is a table representation of a firm / firms showing the relationship between price and quantity of a given item. |
Black MarketBlack market is an illegal market where consumers buy up goods at the price ceiling and resell the goods at a higher price. |
Maximum PricesMaximum prices refer to the maximum price producers can charge, also known as a price ceiling. |
Minimum PricesMinimum prices refer to the minimum price producers can charge, also known as a price floor. |
Price ControlPrice control exists where a government or agency intervention in the form of floors or ceilings in the free market. |
QuotasQuotas are quantitative restriction on the production of certain goods. |
RationingRationing is limiting the quantity bought by consumers. |
Rent ControlRent control is a maximum rental that tenants may be charged. |
SubsidiesSubsidies are cash payments to producers. |
TaxesTaxes are a compulsory payment to government. |
ElasticityElasticity is a measure of responsiveness or sensitivity to a dependent variable when an independent variable changes. |
Price Elasticity of DemandPrice elasticity of demand refers to the sensitivity of the quantity demanded to a change in the price of a product. |
Elasticity CoefficientElasticity coefficient is the ratio of the percentage change in quantity demanded to the percentage change in the price of that product. |
Total RevenueTotal revenue is the revenue earned when all products are sold. TR = P x Q. |
Perfectly Inelastic DemandPerfectly inelastic demand exists when the quantity demanded remains unchanged with a change in price. |
Inelastic DemandInelastic demand exists when the change in quantity is smaller than the change in price. |
Unitary Elastic DemandUnitary elastic demand exists when the change in the price is matched by an equally proportional change in quantity demanded. |
Elastic DemandElastic demand exists when the change in quantity is larger than the change in price. |
Perfectly Elastic DemandPerfectly elastic demand exists when the quantity demanded drops to zero with an increase in price. |
Determinants of Price ElasticityDeterminants of price elasticity refers to those factors that affect the consumer’s decision to but more, less or the same with a change in price and, therefore, determines the price elasticity of demand. |
Income Elasticity of DemandIncome elasticity of demand refers to the sensitivity of the quantity demanded to a change in the income of a consumer. |
Essential GoodsEssential goods are goods which the consumer needs for day to day living. |
Luxury GoodsLuxury goods are ‘nice to haves’ but are not necessary for survival. |
Cross Elasticity of DemandCross elasticity of demand refers to the sensitivity of the quantity demanded of one product to a change in the price of a related product. |
Accounting CostsAccounting costs are explicit costs only. |
Accounting ProfitAccounting profit is total revenue minus explicit costs where TR > explicit costs. |
Average Cost (AC) or (ATC)Average cost (AC) or (ATC) are total costs incurred per item produced. |
Average Fixed Costs (AFC)Average fixed costs (AFC) are fixed costs per item produced. |
Average Product (AP)Average product (AP) is the number of items produced per worker. |
Average Variable Costs (AVC)Average variable costs (AVC) are variable costs per item produced. |
Economic CostsEconomic costs are implicit costs plus explicit costs. |
Economic ProfitEconomic profit is the result of total revenue minus explicit costs minus implicit costs. |
Explicit CostsExplicit costs are reflected in money terms, e.g. salary. |
Fixed Inputs or InputsFixed inputs or inputs are those inputs that do not change in the short run with the number of items being produced. Examples of fixed factors are buildings, machinery, salaried staff, transport (trucks, etc.) and land. |
Implicit CostsImplicit costs are not reflected in money terms, e.g. satisfaction. This is used by economists only. |
Law of Diminishing Marginal ReturnsLaw of diminishing marginal returns is where marginal production decreases as more of the variable factor (labour) is added to the fixed factor (land). |
Law of Diminishing ReturnsLaw of diminishing returns is when production decreases as more of the variable factor (labour) is added to the fixed factor (land). |
Law of ReturnsLaw of returns is where production at first increases and then decreases as more of the variable factor (labour) is added to the fixed factor (land). |
Long RunLong run is a situation where all factors are variable. |
Marginal Costs (MC)Marginal costs (MC) are the extra costs incurred with the production of one extra unit. |
Marginal Product (MP)Marginal product (MP) measures the addition to the total number of items produced every time a new worker is employed. |
Marginal Revenue (MR)Marginal revenue (MR) is the extra revenue made when one additional item is sold. |
Normal ProfitNormal profit is where revenue minus explicit and implicit costs equals zero. |
Private CostsPrivate costs are costs borne by an individual firm. |
Production FunctionProduction function is the process by which goods and services are made using the 4 factors of production. |
Short runShort run is a situation where some factors (or at least one) are fixed and some are variable. |
Social CostsSocial costs are costs borne by society at large, even those who are not involved in the production or purchasing of the products, e.g. pollution. |
Total Costs (TC)Total costs (TC) are all costs incurred for all factors of production. |
Total Fixed Costs (TFC)Total fixed costs (TFC) are incurred by fixed factors of production. They do not vary with the output level and have to be paid even if nothing is produced. |
Total Product (TP)Total product (TP) measures the total number of items produced as more workers are hired. |
Total Revenue (TR)Total revenue (TR) is the total income received through the sale of goods. |
Total Variable Costs (TVC)Total variable costs (TVC) are costs that are incurred by variable factors of production. These costs vary with the number of items produced. |
Variable InputsVariable inputs are those inputs that vary with the number of items being produced. Examples include raw materials, stationery, fuel and labour. |
Allocative EfficiencyAllocative efficiency exists when resources cannot be reallocated without making at least one person better off without making another worse off. |
Break-Even PointBreak-even point exists when average costs (AC) equals average revenue (AR). |
CollusionCollusion exists when competing suppliers meet to fix prices or divide market share. |
Company EquilibriumCompany equilibrium exists where the output or quantity produced is where profit is maximised and where marginal cost = marginal revenue. |
Demand Curve for the Product of the FirmDemand curve for the product of the firm illustrates the quantity of products the firm will be able to sell at each market price. |
Industry EquilibriumIndustry equilibrium exists where all firms in the industry make normal profit in the long run. |
Industry or Market SupplyIndustry or market supply is the horizontal addition of all individual firm supply curves where the rising part of the MC curve above shut-down point is the individual firm’s supply curve. |
Market StructureMarket structure organisational features that dominate a market such as entry and exit, number of firms, etc. |
MonopolisticMonopolistic competition is a market form where there are many firms and many close substitute products. |
MonopolyMonopoly is often called the perfect form of imperfect competition. There is only ONE producer and entry to the market is blocked. |
OligopolyOligopoly is a market from where the number of sellers is limited, but each firm in the market is large. |
Perfect CompetitionPerfect competition is a market form where there are a large number of small firms, none of which can influence the market equilibrium price, since each firm’s output is very small compared to the total market supply. |
Price DiscriminationPrice discrimination exists when firms charge different sectors different prices for the same good or service, not attributable to cost differences. |
Price TakerPrice taker is a company or consumer who has no influence on the market price. |
Productive EfficiencyProductive efficiency is a situation where all firms are producing where average costs are at a minimum, and there is no wastage of resources. |
Profit Maximising RuleProfit maximising rule |
Shut Down RuleShut down rule states that a firm should only produce if average revenue (AR) is equal to or greater than average variable cost (AVC), i.e. where average fixed costs (AFC) are covered. |
Supply Curve of the FirmSupply curve of the firm is the rising part of the MC curve above shut-down point where AR = AVC. |
Total ProfitTotal profit is the product of average revenue (AR) X quantity (Q) or (TP). |
Balance of Payments StabilityBalance of payments stability refers to the macroeconomic objective of having stability regarding exports and imports. |
Basic PricesBasic prices are used when calculating GDP using the production or expenditure methods. Basic prices include indirect taxes on production such as payroll taxes, but exclude subsidies on production such as gold mining subsidies. |
Constant PricesConstant prices are expressed in relation to a selected base year’s value or price. Also known as real prices. |
Consumption of Fixed CapitalConsumption of fixed capital is the use of all manufactured resources, e.g. machines, buildings, tools, etc. over time. |
Current PricesCurrent prices are expressed in today’s value (i.e. today’s prices). Also known as nominal prices. |
Distribution of IncomeDistribution of income refers to how the country’s wealth is distributed among the population. |
Expenditure MethodExpenditure method is one of the methods to calculate GDP by adding all sector expenditure in the economy. |
Factor CostFactor cost is a measure expressed as an income or factor cost is used when using the income method to calculate GDP. These measures exclude indirect taxes such as VAT, but include subsidies on income such as housing subsidies. |
Full EmploymentFull employment is a macroeconomic objective and refers to the full employment of all factors of production, the most important being labour. |
Gini CoefficientGini coefficient measures the degree of inequality using the Lorenz curve, and is expressed as an index. |
Gross Domestic Expenditure (GDE)Gross domestic expenditure (GDE) indicates the value of spending within the borders of a country. |
Gross Domestic Product (GDP)Gross domestic product (GDP) measures the market value of all final goods and services produced within the boundaries of a country over a period of time (normally one year). |
Gross National Income (GNI)Gross national income (GNI) is a measure of national welfare and is calculated thus: GDP minus foreign factor (primary income) payments plus foreign factor (primary income) receipts. |
Income methodIncome method is a method of calculating GDP by adding all factor payments. |
Lorenz CurveLorenz curve is a graphic device used to show the degree of inequality in an economy. |
Market PricesMarket prices are used when calculating GDP through the expenditure method. Market prices include indirect taxes (e.g. VAT) and exclude subsidies. |
Nominal GDPNominal GDP is GDP expressed at today’s prices. |
Price StabilityPrice stability is a macroeconomic objective which aims to keep inflation at a low and stable level. |
Production MethodProduction method is a method of calculating GDP using the value added at each stage of the production process. |
Purchasing PowerPurchasing power refers to what one can buy with one’s income. |
Real GDPReal GDP is GDP expressed at the prices of a given base year. Real GDP = nominal GDP – inflation. |
Value AddedValue added refers to the value added to the product at each stage of the production process. |
Accommodation PolicyAccommodation policy refers to the SARB as lender of last resort. The SARB holds Repo auctions where banks can borrow money against assets such as Government Bonds, Land Bank Bills and Reserve Bank debentures. |
Bank SupervisionBank supervision is the regulation of commercial and other banks. |
Fiscal BudgetFiscal Budget is the main instrument of fiscal policy, which is presented annually by the Minister of Finance and outlines government spending and government receipts. |
Budget DeficitBudget deficit exists when government spending is greater than government receipts. |
Cash Reserve RequirementCash reserve requirement refers to the minimum amount banks are required to hold back out of total deposits. |
Contractionary PolicyContractionary policy refers to either monetary or fiscal policy aimed at counteracting inflation. |
Demand ManagementDemand management refers to fiscal or monetary policy aimed at increasing or decreasing demand. |
Direct TaxesDirect taxes are taxes levied on individuals or companies. |
Expansionary PolicyExpansionary policy refers to either monetary or fiscal policy aimed at counteracting unemployment. |
Financial IntermediaryFinancial intermediary examples include banks, the Johannesburg Securities Exchange (JSE) and insurance houses, which act as a link between household savings and firms’ investment (capital formation). |
Fiscal PolicyFiscal policy outlines government spending and government receipts. |
Government SpendingGovernment spending includes all spending by government in the form of government consumption spending, capital expenditure, transfers and debt repayment. |
Indirect TaxesIndirect taxes are levied on actions, such as the purchasing of goods. |
Inflation TargetingInflation targeting refers to the effort by the reserve bank to keep inflation between certain upper and lower limits. |
LagsLags are time delays associated with fiscal or monetary policy. |
Monetary PolicyMonetary policy refers to the indirect intervention in economy by the reserve bank through manipulating money supply and interest rates. |
NationalisationNationalisation refers to the transferring ownership of assets and resources from the private sector to the government. |
Open Market PolicyOpen market policy refers to the buying and selling of Government bills and securities (paper) in order to influence the amount of money in circulation, and the interest rate. |
PrivatisationPrivatisation refers to transferring ownership of assets and resources from the government to the private sector. |
Progressive TaxProgressive tax is where the % of tax paid increases as earnings increase. |
Repo RateRepo rate is the interest rate associated with the sale and buy-back of repos (financial assets) between banks and the reserve bank. |
SecuritiesSecurities are documents that state the interest rate payable on a loan and when the loan must be paid back. |
South African Reserve BankSouth African reserve bank is the main financial institute in SA. |
TaxationTaxation is a compulsory payment to the government. |
Value Added TaxValue added tax is a tax levied at each stage of the production process. |
Absolute AdvantageAbsolute advantage exists where a country can produce a good or service with less effort or resources than another country. |
AppreciationAppreciation is where the value of a currency increases compared to another currency without interference. |
AutarkyAutarky exists when a country closes its borders to international trade. |
Balance of PaymentsBalance of payments is a statistical account that records all transactions relating to the flow of goods, services and funds across international boundaries. |
Comparative / Relative AdvantageComparative / relative advantage exists where a country has a lower opportunity cost in the production of a good or service than does another country. |
Current AccountCurrent account is a record of exports, imports, income receipts and payments and transfers of a country over a period of time. |
DepreciationDepreciation is where the value of a currency decreases compared to another currency without interference. |
Direct InvestmentDirect investment includes all transactions where the investor gains control of a business, either through establishing a new business or by buying shares in an existing business. |
Equilibrium Exchange RateEquilibrium exchange rate is where the quantity of foreign currency demanded is equal to the quantity of foreign currency supplied. Expressed as the value of one currency in terms of the value of another. |
Exchange RateExchange rate is where the value of one currency is expressed in terms of the value of another. |
Exchange Rate PolicyExchange rate policy refers to policy measures put in place to discourage shifting funds offshore. |
Financial AccountFinancial account records all financial flows coming in and going out of a country. |
Floating Exchange RatesFloating exchange rates exists when currencies are left free to appreciate or depreciate according to demand and supply and there is no reserve bank intervention. |
Foreign Exchange MarketForeign exchange market exists everywhere and anywhere where currencies are traded. |
Gross ReservesGross reserves refer to borrowing funds to cover the balance of payments deficit. |
Import QuotasImport quotas are quantitative restrictions on the number of imported items. |
Import tariffsImport tariffs are taxes levied on specific goods and services imported into the country. |
Managed FloatingManaged floating; a currency is managed or dirty or a managed float when it is allowed to float, but authorities intervene from time to time to even out short-term fluctuations. |
Net Primary Income PaymentsNet primary income payments is the net result of adding income earned by South Africans outside the borders and subtracting income earned by foreigners inside SA. |
Open EconomyOpen economy is an economy that is open to trade with other countries. |
Portfolio InvestmentPortfolio investment refers to the buying of assets such as shares or bonds where the investor has no say in the running of the business. |
SpeculationSpeculation exists when people buy currencies in the hope that they will increase in value. |
Terms of TradeTerms of trade is the ratio between export prices and import prices. |
Trade BalanceTrade balance equals merchandise exports – merchandise imports + net gold exports. |
Trade PolicyTrade policy is the indirect intervention by government to affect the volume or price of exports and imports. |
InflationInflation is defined as a continuous and considerable rise in the general price level over a period of time. |
Distribution EffectsDistribution effects refer to the redistribution of income between sectors of the economy as a result of inflation. |
Economic EffectsEconomic effects refer to the economic benefits and disadvantages between sectors of the economy as a result of inflation. |
Social and Political EffectsSocial and political effects refer to the societal dissatisfaction between sectors of the economy as a result of inflation and the resultant political choices people make. |
HyperinflationHyperinflation extremely high inflation. |
Demand-Pull InflationDemand-pull inflation where demand increases and pulls prices up. |
Cost-Push InflationCost-push inflation where supply decreases and pushes prices up. |
StagflationStagflation where supply decreases, pushes prices up and increases unemployment at the same time. |
Incomes PolicyIncomes policy is a measure aimed at reducing inflation by dropping wages and increasing supply. |
UnemploymentUnemployment refers to those people who are willing and able to work, i.e. they are potentially active, but cannot find a job. |
Frictional UnemploymentFrictional unemployment refers to those people who are temporarily between jobs. |
Seasonal UnemploymentSeasonal unemployment refers to people who are employed in seasonal jobs and become unemployed out of season. |
Cyclical UnemploymenCyclical unemployment coincides with a downswing or slump in the business cycle. |
Structural UnemploymentStructural unemployment refers to a mismatch between available jobs and job-seekers qualifications (or lack of them). |
Informal SectorInformal sector is sometimes called the shadow, underground or hidden economy, and refers to people who are employed in economic activities that are unregistered, e.g. money lenders and petty traders. |
AccountingAccounting – the system/process of gathering, analysing, recording, reporting and interpreting financial information. |
GAAPGAAP – General Acceptable Accounting Practice |
IFRSIFRS – International Financial Reporting Standards |
StakeholdersStakeholders – any party with direct or indirect association/ interest in a business enterprise. |
LiabilityLiability – present obligation, resulting from past event, the settlement of which leads to decrease in economic benefit. |
Owners’ EquityOwners’ equity – the residual interest of owners in a business. |
Double Entry ConcepDouble entry concept- in every transaction, there is a DEBIT and a corresponding CREDIT entry. DEBIT-the receiver and CREDIT- the giver. |
Accrual BasisAccrual basis – all the income earned and expenses incurred are recorded in the period to which they relate and not when cash is received or paid. |
Credit LossesCredit losses – credit clients that have defaulted. Also referred to as bad debts. |
AccruedAccrued – arrears, owing or outstanding |
PrepaidPrepaid – amount paid/received in advance. |
AssetAsset – a resource controlled by an entity, resulting from past event and from which future economic benefits are expected to flow to the entity. |
ExpenseExpense – amounts incurred during a particular financial period. |
Consumable StoresConsumable stores – items such as packing material, stationery and any other consumable consumed within a financial period. |
DividendsDividends – a share of profits received by shareholders |
Statement of Profit and LossStatement of profit and loss – provides a summary of an organisation’s revenue and expenses. |
Statement of Financial PositionStatement of financial position – evaluates the financial position of a company by focusing on its assets, liabilities and shareholders’ equity |
Relevant CostsRelevant costs – costs appropriate to aiding the decision making process. |
Variable CostsVariable costs – costs that fluctuate in line with volume |
Fixed CostsFixed costs – costs that remain constant even when volume changes. |
Sunk CostsSunk costs– costs already incurred, therefore irrelevant to the decision at hand. |
Direct MaterialDirect material – primary/raw material to be converted into a finished product through a manufacturing process. |
Indirect MaterialIndirect material – secondary material used in the conversion process that contributes to the finished product through a manufacturing process. |
Opportunity CostsOpportunity costs– value of potential benefit sacrificed when one course of action is chosen over another. |
Margin of SafetyMargin of safety– the’ safety net’ due to the budgeted sales above the breakeven point. |
Prime CostsPrime costs – sum of direct materials and direct labour. |
EOQEOQ – Optimal order level that keeps the costs associated with inventory at their lowest level. |
Reorder PointReorder point – is the level of stock at which a replenishment order should be placed. |
VATVAT – Value Added Tax (15%) it used to be 14% |
VAT VendorVAT Vendor – a business registered to collect VAT from customers on behalf of SARS and can claim VAT back if it was paid in buying inputs. |
Input VATInput VAT – A vendor can claim back this VAT as it is paid on supply bought for the business. It is an asset. |
Output VATOutput VAT – VAT that is charged by a vendor to customers and collected on behalf of SARS. It is a liability. |
VAT RefundableVAT Refundable – Input VAT is more than Output VAT |
VAT PayableVAT Payable – Output VAT is more than input VAT |
Carriage on PurchasesCarriage on purchases – cost of transporting goods purchased to the business premises.eg freight in and railage in |
Marked PriceMarked price – Selling price VAT inclusive. (displayed price) |
Direct LabourDirect labour – is the effort of personal creating a product. |
ContributionContribution – the difference between sales and variable/direct cost. It is as good as gross profit for a retail business. |
Mark-UpMark-up – profit expressed in terms of cost price. |
OverheadsOverheads – all costs other than direct materials and direct labour. |
Over AppliedOver applied – when applied overheads exceed actual overheads. |
ParaphrasingParaphrasing – rewriting or repeating something using your own words but not changing the meaning. |
PlagiarismPlagiarism – copying the ideas of others into your submission without giving the source due acknowledgment by referencing it. |
SummarisingSummarising – reducing the extent of a written piece to capture the main ideas. |
Dependant clausesDependant clauses – sections of a sentence which rely on each other to generate meaning. |
ParagraphParagraph – a group of sentences built around a single key concept or idea. |
RevisingRevising – going through a piece of writing more than once to make corrections or to memorise. |
ArgumentArgument - a coherent line of reasoning. |
RefutingRefuting – offering ideas which are opposed to another person’s statement. |
ValidationValidation – evidence which supports an idea. |
Mind MappingMind mapping – a drawn picture containing the main points of a section of study material. |
PortfolioPortfolio – a collection of documents depicting a process of learning. |
ProductivityProductivity – clearly discernible results of a period of dedication to a specific task or range of tasks. |
Free GoodsFree goods are found in abundance and do not carry a price directly, although taxation may be used to maintain these goods, e.g. fresh air |
Order of PriorityThe process of deciding which items are more important than others and them placing them into an order with the most important first and the least important last. |
EconomicsEconomics is the study of how man attempts to satisfy his unlimited wants and needs by way of limited resources. This relative scarcity of resources implies the existence of cost and the need for choice. |
Resources in ProductionResources in production are also known as means or factors of production, which include natural resources, human resources, capital and entrepreneurship. |
ScarcitySomething being in short or limited supply. |
Grammar"The study or use of the rules about how words change their form and combine with other words to make sentences" Cambridge English Dictionary |
6-Step Selling CycleThe selling cycle is the process a company or organisation undergoes when sell-ing their product or service to a customer. Step 1: Prospecting Step 2: Planning the sales call Step 3: Approach and sales presentation methods Step 4: Handling objections Step 5: Closing the sale Step 6: Follow up |
Key Account ManagementKey account management is a term used, to describe the approach your sales people take to your most important customers and clients. |
Lead TimeLead time is the total sum of time between the recognition of a need for an order and the final availability of the goods/raw materials for use in production or available for sale. Lead time consists of both purchasing lead time and manufacturing lead time. Manufacturing lead time applies when the final product is manufactured or assembled by the supplier. |
Carrying CostIn marketing, carrying cost, carrying cost of inventory or holding cost refers to the total cost of holding inventory. This includes warehousing costs such as rent, utilities and salaries, financial costs such as opportunity cost, and inventory costs related to perishability, shrinkage and insurance. |
Ordering CostsOrdering costs are the expenses incurred to create and process an order to a supplier. These costs are included in the determination of the economic order quantity for an inventory item. |
Raw MaterialsThe items that are purchased or the materials extracted which are then transformed into components or products using a manufacturing process |
Finished GoodsGoods that have either been completed in a production process, or purchased in a completed form, but which have not yet been sold to customers. |
Work-in-ProgressItems that are in different stages of completion throughout the plant, including all raw material that has been released from the store for preliminary transformation up to a completely processed product awaiting final inspection and acceptance as finished goods inventory. The value of semi-finished stock and components may also be included this category |
Law of Increasing ReturnsThe law of increasing returns states that: Production increases as more of the variable factor (labour) is added to the fixed factor (land). |
Law of Decreasing ReturnsThe law of decreasing returns states that: Production decreases as more of the variable factor (labour) is added to the fixed factor (land). |
The Cost FunctionThe Cost Function, shows the relationship between the price of inputs and the quantity produced. A firm’s costs of production depend on the prices and quantities of its factors of production. When a firms’ output changes we can also expect the firm’s costs to change. The relationship between the production function and the cost function is that the cost function is derived from the production function. |
Average Revenue (AR)Average revenue (AR) is revenue per item sold. |
Supply TheoryThe theory of supply of goods also known as the “Supply Theory” attempts to understand why and how firms do what they do. Analysing the firm’s behaviours and to understand what their goals are. This theory can also be called the “Theory of the firm” according to your textbook. In this module we will work on the assumption that firms seek to maximise their profits. |
Counter-ArgumentAn argument or set of reasons put forward to oppose an idea or theory developed in another argument. |
Indirect LabourSupervisory staff and maintenance staff’s labour in a production environment cannot be physically traced to a specific product and is therefore regarded as indirect labour. |
Market ValueMarket value refers to price as determined by demand and supply. Market value or OMV is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with open market value, fair value or fair market value, although these terms have distinct definitions in different standards, and differ in some circumstances. |
Equal AdvantageExists where a country can produce a good or ser-vice with the same opportunity costs than another country, i.e. their pro-duction ratios are the same. Countries with equal advantage will not trade. |
Producer Price Index (PPI)Producer price index is an index of the prices of a representative basket of producer goods (inputs) and measures the cost of production. |
Consumer Price Index (CPI)Consumer price index is an index of the relative prices of a representative basket of goods and services and measures the cost of living. |
Consumer SurplusConsumer surplus is defined as the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e. the market price). |
Customer ServiceCustomer service is the provision of service to customers before, during, and after a purchase. |
EffectivenessThe degree to which something is successful in producing a desired result; success. |
EfficiencyEfficiency is the ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste. |
Reverse LogisticsReverse logistics is for all operations related to the reuse of products and materials. It is "the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. |
Value ChainsA value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product for the market. |
Product A product is an object or system made available for consumer use; it is anything that can be offered to a market to satisfy the desire or need of a customer. |
LogisticsLogistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations. |
Supply Chain ManagementThe management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods as well as end to end order fulfilment from point of origin to point of consumption. |
RecruitmentRefers to the sourcing and screening of suitable candidates to fill a position from within or outside the organisation. |
SelectionEntails the process of deciding on the most suitable candidate for appointment in a position. |
Performance ManagementProcess that links what individuals and teams do on a daily basis with the larger goals, value and cultural practices of the organisation and the needs of the customers. |
Economies of DensityIn microeconomics, economies of density are cost savings resulting from spatial proximity of suppliers or providers. Typically higher population densities allow synergies in service provision leading to lower unit costs. |
Economies of ScopeEconomies of scope are "efficiencies formed by variety, not volume". In economics, "economies" is synonymous with cost savings and "scope" is synonymous with broadening production/services through diversified products. |
ConvergenceThe merging of distinct technologies, industries, or devices into a unified whole |
Market EconomyA market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. |
TranshipmentThis involves the transfer of goods from one carrier to another and/or from one mode to the other. |
Social ResponsibilityThe responsibility of an organization for the impacts of its decisions and activities (products, services and processes) on society and the environment, through transparent and ethical behaviour that: • contributes to sustainable development, including health and welfare of society; • takes account of the stakeholders’ expectations; • is in compliance with the applicable law and consistent with international norms of behaviour; and • is integrated throughout the organization and practiced in its relationships. |
Economic PrincipleThe economic principle encompasses a wide variety of economic laws and theories that define or explain how an economy attempts to satisfy the unlimited demand in the marketplace with a finite supply of resources available to do so. |
BusinessA business is defined as an organization or enterprising entity engaged in commercial, industrial, or professional activities. The term "business" also refers to the organized efforts and activities of individuals to produce and sell goods and services for profit. |
Business ManagementBusiness management definition is managing the coordination and organization of business activities. Management is in charge of planning, organizing, directing, and controlling the business's resources so they can meet the objectives of the policy. |
IndivisibilityUnable to be divided or separated. |
SWOT AnalysisSWOT analysis is a tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot do, as well as its potential opportunities and threats. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). |
Micro EnvironmentFactors or elements in a company’s immediate area of operations that affect performance and decision-making abilities. These factors include competitors, customers, distribution channels, suppliers and so forth. |
IntermediaryAlso seen as a ‘middle man’. Intermediary is a company or person (such as a broker or consultant) who acts as a mediator or a link between parties for a business deal, investment decision, negotiation, and so forth. |
Consumer Buyer BehaviourRefers to the actions taken (both on and offline) by consumers before buying a product or service. |
MarketingThe process of planning and executing the conception, pricing, marketing communication and distribution of ideas, products, and services to create exchange that satisfy the organisational goals. |
Marketing ResearchIs the process that provides relevant data to help solve marketing challenges that a business will most likely face--an integral part of the business planning process. |
Marketing SegmentationIs the process of dividing a market of potential customers into groups, or segments, based on different characteristics. |
Public RelationsThe management function that establishes and maintains mutually beneficial relationships between an organisation and its public’s. |
PublicGroups of people who have a common interest or common values in a particular situation. |
AcquisitionThe takeover of one entity by another. |
CabotageThe right to transport in a specific territory. More specifically, it refers to transportation between two terminals located in the same country, irrespective of the country in which the mode providing the service is registered. Cabotage is subject to restrictions and regulations. Under such circumstances, each nation reserves for its national carriers the right to move domestic freight or passenger traffic.
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Custom BrokerThese organisations oversee the movement of goods through customs and ensure that the documentation for a shipment is complete and accurate. |
Freight ForwarderA person or a corporation that accepts less than a truckload or less than a carload shipment from shippers and combines them into carload or truckload lots. |
MergersOccur when two separate entities combine forces to create a new, joint organisation.
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CorridorA linear orientation of transport routes and flows connecting important locations that act as origins, destinations and point of transhipment. Corridors are multi-scalar entities depending on the types of flow being investigated. Thus, they can be composed of streets, highways, transit routes, rail lines, maritime lines, or air paths.
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Green CarA green/clean/eco-friendly/environmentally friendly vehicle is a road motor vehicle that produces less harmful impacts to the environment compared to conventional internal combustion engine vehicles running on gasoline or diesel.
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Hybrid VehicleA hybrid vehicle makes use of two or more distinct types of power, such as an internal combustion engine to drive an electric generator that powers an electric motor.
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MaglevShort for ‘magnetic levitation’. Technology enabling trains to move at high speeds above a guideway on a cushion generated by magnetic force. |
ManufacturingManufacturing is the production of goods through the use of labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. |
ProcurementProcurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement generally involves making buying decisions under conditions of scarcity. |
Engineer to Order (ETO)Manufacturing process where product is built as per customer specifica-tion due to requiring unique engineering, design, customisation etc. |
Make to Order (MTO)A production environment where a good or service can be made after receipt of a customer’s order. The final product is usually a combination of standard items and items custom designed to meet the special needs of the customer. |
Assemble to Order (ATO)A production environment where a large number of end products (based on the selection of options and accessories) may be assembled from com-mon components. The key items used to produce the final product, up to the sub-assembly level, are planned and usually kept in inventory in anticipation of a customer order. |
Design to Order (DTO)Individual parts are designed and assembled specifically for each customer order. Even if the end product contains standard parts, a separate pro-duction process with a specific parts list is required for the product. |
Bill of Material (BOM)A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly. |
Implementation BarriersChallenges or obstacles which prevents or limits the process of putting a decision or plan into effect, execution. |
Order lead TimesA lead time is the latency between the initiation and completion of a process. For example, the lead time between the placement of an order and delivery of new cars by a given manufacturer might be between 2 weeks and 6 months, depending on various particularities. |
Functional ProductsFunctional products are items that are bought regularly and are considered staples. They are widely available in retail outlets, such as, grocery and convenient stores and have a predictable long life cycle due to their stability, although, competition is high resulting in low profit margins. |
Innovative ProductsProduct innovation is the creation and subsequent introduction of a good or service that is either new, or an improved version of previous goods or services. |
CultureCulture is an umbrella term which encompasses the social behavior and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups. |
Organisational StrategyAn organizational strategy is a plan that specifies how your business will allocate resources (e.g., money, labor, and inventory) to support infrastructure, production, marketing, inventory, and other business activities. |
Supply Chain StrategyThe supply chain strategy establishes how organisations work with chain members, which, if orchestrated and managed correctly, can increase organisational success. |
StrategyStrategy is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. |
Holt's MethodHolt’s method, also known as double exponential smoothing, as it adds growth factor. Exponential smoothing is a rule of thumb technique for smoothing time series data using the exponential window function. Whereas in the simple moving average the past observations are weighted equally, exponential functions are used to assign exponentially decreasing weights over time. |
Moving AveragesIn statistics, a moving average is a calculation to analyze data points by creating a series of averages of different subsets of the full data set. It is also called a moving mean or rolling mean and is a type of finite impulse response filter. Variations include: simple, and cumulative, or weighted forms. |
ForecastingForecasting is the process of making predictions based on past and present data and most commonly by analysis of trends. A commonplace example might be estimation of some variable of interest at some specified future date. Prediction is a similar, but more general term. |
Customer Market SurveyMarket survey is the survey research and analysis of the market for a particular product/service which includes the investigation into customer inclinations. A study of various customer capabilities such as investment attributes and buying potential. |
SeasonalitySeasonality refers to predictable changes that occur over a one-year period in a business or economy based on the seasons including calendar or commercial seasons. One example of a seasonal measure is retail sales, which typically sees higher spending during the fourth quarter of the calendar year. |
Forecast AccuracyForecast accuracy is the extent of difference between the forecasted values and the actual values. |
Activity Based CostingActivity-based costing is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. Therefore this model assigns more indirect costs into direct costs compared to conventional costing. |
Value DriversValue drivers are anything that can be added to a product or service that will increase its value to consumers. These differentiate a product or service from those of a competitor and make them more appealing to consumers. |
Economic Value Added (EVA)In corporate finance, as part of fundamental analysis, economic value added is an estimate of a firm's economic profit, or the value created in excess of the required return of the company's shareholders. EVA is the net profit less the capital charge for raising the firm's capital. |
Free Cash FlowFree cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. ... Interest payments are excluded from the generally accepted definition of free cash flow. |
Cost of EquityThe cost of equity is the return a company requires to decide if an investment meets capital return requirements. ... A firm's cost of equity represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership. |
Shareholders' ValueShareholder value is a business term, sometimes phrased as shareholder value maximization or as the shareholder value model, which implies that the ultimate measure of a company's success is the extent to which it enriches shareholders. |
CongestionOccurs when transport demand exceeds transport supply in a specific section of the transport system.
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CommuterA person who travels regularly between home and work or school.
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Commuter Bus ServiceFixed-route bus service, predominantly in one direction during peak periods, with limited stops, using multi-ride tickets and routes of extended length, usually between the central business district and outlying suburbs.
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Commuter RailLocal and regional passenger train operations between a central city, its suburbs and/or another central city.
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MobilityRefers to a movement of people or freight. It can have different levels linked to the speed, capacity, and efficiency of movements.
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FareThe price paid by the user of a transport service at the moment of use.
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Fixed CostCosts that do not vary with the quantity shipped in the short run, i.e. costs that must be paid up front to begin producing transportation services.
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Public TransportPassenger transportation services, usually local in scope, that are available to any person who pays a prescribed fare. It operates on established schedules along designated routes or lines with specific stops and is designed to move relatively large numbers of people at one time.
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Rapid TransitRail or motorbus transit service operating completely separate from all modes of transportation on an exclusive right-of-way. |
RateThe price of transportation services paid by the consumer. They are the negotiated monetary costs of moving a passenger or a unit of freight between a specific origin and destination.
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Transaction CostsCosts required for gathering information, negotiating, and enforcing contracts, letters of credit and transactions. Often referred to as the cost of doing business. |
PurchasingThe activity of purchasing is to acquire goods and/or services to meet the objectives of a business. Purchasing is done according to a standard as outlined in the procurement policy of the business. |
Total Quality Management (TQM)TQM describes a structured, systematic and integrated management approach to long–term success through maximizing internal and external customer and supplier satisfaction. It is where all managers and employees of an organization use quantitative methods to participate together as a team and actively work to support each other in improving all the processes, products, services, and the culture (ethos) in which they work. It is a management philosophy that looks to integrate all the organizational functions (marketing, finance, customer service, etc.) to continually improve on the delivery of customer needs and business objectives. TQM is also referred to today as Business Excellence |
Quality AssuranceQuality assurance is a way of preventing mistakes and defects in manufactured products and avoiding problems when delivering products or services to customers; which ISO 9000 defines as "part of quality management focused on providing confidence that quality requirements will be fulfilled" |
Job ShopsJob shops are typically small manufacturing systems that handle job production, that is, custom/bespoke or semi-custom/bespoke manufacturing processes such as small to medium-size customer orders or batch jobs. Job shops typically move on to different jobs (possibly with different customers) when each job is completed. |
Concurrent EngineeringConcurrent engineering is a work methodology emphasizing the parallelization of tasks, which is sometimes called simultaneous engineering or integrated product development using an integrated product team approach. |
Capacity PlanningCapacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity planning, design capacity is the maximum amount of work that an organization is capable of completing in a given period. |
Flexibilitywillingness to change or compromise. |
ControlThe definition of control is power to direct, or an accepted comparison model in an experiment, or a device used for regulation. |
Trade-OffA trade-off is a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects. In simple terms, a tradeoff is where one thing increases, and another must decrease. |
Customer Service Measurementscustomer service metrics, as the name suggests, provide data on your customer service team's performance in terms of efficiency and speed. These metrics focus purely on numbers, such as how many emails you receive per day, how many calls you answer, the rate of response, and so on. |
Employee Engagement CycleThe employee life cycle model (ELC) is an organizational method used to visualize how an employee engages with the company they are a part of. There are six stages involved in this model: Attraction, Recruitment, Onboarding, Development, Retention, and Separation. |
Customer EngagementDefinition of customer engagement: Customer engagement monitors the relationship between a consumer and a company. This relationship is important for encouraging customer loyalty, increasing awareness and looking at customer satisfaction. |
Logistics Customer ServiceLogistics customer service is a part of a firm's overall customer service offering, customer service elements that are specific to logistics operations including fulfillment, speed, quality, and cost. The term fulfillment process has been described as the entire process of filling the customer's order. |
Dimensions of Customer ServiceService quality in the SERVQUAL model consists of five dimensions: reliability, responsiveness, assurance, empathy, and tangibles. These dimensions are used in service quality gap, which implies that there is a difference between the expectations of customers and perception of services |
Network DesignNetwork planning and design is an iterative process, encompassing topological design, network-synthesis, and network-realization, and is aimed at ensuring that a new telecommunications network or service meets the needs of the subscriber and operator. |
Bridging Financefinance provided for a short period (two to three weeks) that an organisation might use when they are waiting for approval of longer-term finance. |
Capitalisation StructureWay of funding operations and growth by using different sources of funds, e.g. equity, debt or preference share capital. |
Cash BudgetUsed to facilitate the planning and control of cash. |
Cash CycleThe flow of cash begins with the payment for raw materials and ends with receipt of cash on goods sold. |