| Transformation | | aims to eliminate waste at every stage of production. |
| value adding | | when the business creates novel products, and in doing so leads the market |
| economies of scale | | those that are varied according to the need of customers. generally produced with a market focus rather than a production focus. |
| product differentiation | | the actions that a business takes to achieve specific goals |
| supply chain | | those cost that do not change regardless of the level of business activity |
| innovation | | the use of outside specialists to undertake one or more key business functions |
| fixed costs | | refers to the business processes that invlove transformation or, more generally 'production' |
| variable costs | | the resources used in the transformation (production) process |
| outsourcing | | the cost advantages that can be created as a result of an increase in scale of business operations |
| cost leadership | | business expenses, such as rent, that are not directly attributable to any department or product and can therefore be assigned only arbitrarily |
| inputs | | those that are mass produced, usually on an assembly line. usually uniform in quaility and meet a predetermined level of quality. Generally produced with a production focus |
| outputs | | the range of suppliers a business has and the nature of its relationship with those suppliers |
| efficiency | | the end rsult of the business efforts - the good or service that is provided or delivered to the customer |
| interdependence | | distingushing products (goods or services in some way from its competitors |
| strategies | | the ability of a business to use its resources effectively in ensuring financial stability and profitability |
| standardised goods | | the matual dependence that the key functions have on one another. |
| customised goods | | the creation of extra or added value as inputs are transformed into outputs |
| overheads | | those costs that vary in direct relationship to the level of business activity |
| lean production | | aiming to have the lowest costs or to be the most price-compeitive in the market |
| operations | | the conversion of inputs into outputs |
