Chapter 20 The Nature of Operations

Question	Answer
Added value	The difference between the cost of purchasing raw materials and the price the finished goods are sold for
Production	Converting inputs into outputs
The level of production	Number of units produced during a time of period
Productivity	The ratio of outputs to inputs during production, e.g. output per worker per time period
Efficiency	Producing output at the highest ratio of output to input
Effectiveness	Meeting the objectives of the enterprise by using inputs productively to meet customers' needs
Labour intensive	Involving a high level of labour input compared with capital equipment
Capital intensive	Involving a high quantity of capital equipment compared with labour input

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