UNIT 6: CLASSIFICATION OF BUSINESSES

I. LEAD-IN
- The most prominent features in these photographs is the difference in flats, factories,
road lanes, facilities of an area between the past and now. Picture 2 illustrates the
elements of the infrastructure of a modern industrialized country.
II. READING 1
EX1:
- Primary sector: cutting metal, smelting iron, digging iron ore, mining coal, milling
metal, pressing metal, pumping oil, welding metal
- Secondary sector: assembling, advertising products, marketing products, packaging
products, laying cables, building, maintenance.
- Tertiary sector: calculating prices, distributing added value, transportation
EX2:
Business Primary Secondary Tertiary
Insurance 
Forestry 
Coal mining 
Computer assembly 
Travel agent 
Bakery 
Car showroom 

EX3:
- Insurance, travel agent, car showroom: Apply technology to improve customer service
by connecting to customers faster and more effectively
- Forestry, coal mining, bakery: use modern machines to ensure the safety of workers,
increase productivy and quality
- Computer assembly: analyze data, creating softwares, finding customers and resources.
EX4:

Forms of businesses Advantages Disadvantages

Sole trader - Fewer tax payment - Owners are responsible
- Owners don’t have to for losses and debts
 share profits - Limited company status -
- Less paperwork > hard to employ workers
and expose to customers
- Lack of support
Partnerships - Have more assistance and - Have to spilt profits
support, more ideas - Disagreements among
- Fewer tax payment partners
- Less financial burden - Can’t make sole decisions
Companies - Reputation and brand - Need high capital to start
- Abundant workforces and develop the business
- More organized and - Have to spilt profits
professional - High taxes
- Can trade anywhere - More complex and
require business
management skills from
directors
Franchising - Brand awareness - Restricting regulations
- Business assistance from - Franchise fee for
the franchisor franchisors
- Lower risks of revenues - Conflicts with franchisors
A joint venture - More resources and - Conflicts and
workforces from different disagreement about
businesses objectives, culture
- Increased capacity, - Take long time to connect
markets, sharing risks and and build relationships
costs
II. READING 2
EX1:
- Statement 1: Manufacturing industry - Statement 5: Service industry
- Statement 2: Service industry - Statement 6: Service industry
- Statement 3: Manufacturing industry - Statement 7: Manufacturing industry
- Statement 4: Manufacturing industry
- I think statement 6 is convincing because factories should be situated outside of major
cities. Major cities should provide high-rising towers, modern facilties, entertainment
services while factories should be located in places which are near to natural resources
for manufacturing.
EX2:
1. exported goods 2. Real estate 3. Financial job 4. Delocalize 5. outsource
III. CASE STUDY 1
a. This means the management of Airco will be transformed from state ownership to the
private ownership
b. This business is in tertiary sector because airline involves transportion industry. Its aim
is to transport passengers and goods.
c. Agreement: The abundant source of investment for better services, increased efficiency
Disagreement: private companies prioritize profit over public service obligations and
safety, maintenance
IV.CASE STUDY 2
a. Two benefits: he’s financially independent + he has his own working life
b. I recommend Rashid should use partnership as he has few savings. Partners can share
money to ease financial burdens
c. His partners + his family
d. Rashid should take Salman as a partner because his business has the additional capital
and Salman will be in charge of paperwork for him.
V. VOCABULARY
EX1:
* 1. c 2.h 3.e 4.g 5.d 6.a 7.b 8.f
* 1. Dug – extracted – converted
2. packaged
EX2:
1. sole trader 2. Partnership 3. Losses 4. liability 5. Bankruptcy 6. corporations
7. Creditors 8. Shares 9. Prospectus 10. Registered
VI. UNIT REVIEW
1. The primary sector of industry extracts and uses the natural resources of Earth to
produce raw materials used by other businesses.
The secondary sector of industry manufactures goods using the raw materials provided by
the primary sector.
The tertiary sector of industry provides services to consumers and the other sectors of
industry.
2. Activities of quaternary sector: information services such as computing, ICT
(information and communication technologies), consultancy (offering advice to
businesses) and R&D (research and development, particularly in scientific fields)
3. Private sector: The sector of the economy in which organisations are owned and
controlled by individuals.
Privatisation: The sale of state-owned assets such as public corporations to the private
sector.
4. Sole trader: a business owned and operated by one person.
Partnership: a form of business in which two or more people agree to jointly own a
business.
Private limited companies: businesses owned by shareholders but they cannot sell shares
to the public.
Public limited companies: businesses owned by shareholders but they can sell shares to
the public and their shares are tradeable on the Stock Exchange.
The franchisor is a business with a product or service idea that it does not want to sell to
consumers directly
A joint venture is when two or more businesses agree to start a new project together,
sharing the capital, the risks and the profits
VII. SUMMARIZE READING
1. READING 1
- 3 stage of economic activity:
+ Primary stage: farming, fishing, forestry and the extraction of natural materials
+ Secondary stage: involves taking the materials and resources provided by the primary
sector and converting them into manufactured or processed goods
+ Tertiary stage: involves providing services to both consumers and other businesses
- Quaternary stage: information services such as computing, ICT and R&D
- Private sector – businesses not owned by the government
- Public sector – government (or state) owned and controlled businesses and
organisations
- Types of business in the private sector:
- sole traders
- partnerships
- private limited companies
- public limited companies
- franchises
- joint ventures
2. Reading 2
- The statements about manufacturing industry and service industry
UNIT 7: PRODUCTION
I. LEAD-IN
- They are in charge of managing the process of converting land, labour and capital into
saleable goods and checking the quality and quantities of products
- Production and operations managers need communication, problem-solving, leadership
skills and I think I have problem-solving skills
- I want to work in this field because I can aquire a better knowledge of the products and
their manufacturing process.
- A production department’s objectives are creating and innovating products to supply for
the market, ensuring the quantity and quality of products.
II. READING 1
EX1:
1. FALSE 2. FALSE 3. TRUE 4. FALSE 5. TRUE
EX2:
1. f 2. g 3. a 4. c 5. d 6. b 7. e 8. h
EX3:
1. e 2. d 3. f 4. g 5. h 6. a 7. b 8. C
III. READING 2
EX1:
1. improvement 2. Culture 3. Process 4. Marketplace 5. Competitors 6. Metrics
7. Cycle 8. Resistance
EX2:
1. inventory 2. Production run 3. Obsolescence 4. Storage 5. Theft
6. Delivery 7. Opportunity cost 8. Discounts 9. Shortages
EX3:
1. inventory 2. delivery 3. theft 4. discounts 5. Production run 6.storage
7. Opportunity cost 8. obsolescence 9. shortages
EX4:
1. b 2. e 3. g 4. d 5. f 6. c 7. a
IV. CASE STUDY 1
METHODS OF PRODUCTION ADVANTAGES LIMITATIONS
Job production - Meet customers’ exact - Higher production cost
needs for each item
- Diversity of products - Only suitable for small-
scale production
- Require high-skilled
labour
Batch production - Save production costs - Risks of inventories
- Small production - Hard to produce a
amounts variety of products
- Time-saving
Flow production - Low unit costs - Set up costs are
- Save time and money expensive
- Output can be - Repetitive tasks ->
produced quickly worker’s low motivation

V. CASE STUDY 2
a. The production manager want to introduce new technology at Sita Ltd to improve
production efficiency, product quality, higher selling price from 10 to 15, competitive
advantage.
b.1 Batch production means baby clothes are produced in groups. One batch of item has
to be completed to move to the next batch.
b.2 Advantages: produce different styles, shapes and colors for each batch, lower cost per
unit, time-saving and cost-effective.
VI. VOCABULARY
EX 1:
1. lead time 2. Purchasing power 3. Optimum costs 4. Assembly line
5. Finished goods 6. Product recall 7. Offshore production 8. Manufacturing
obsolescene 9. Supply chain 10. Zero defects 11. Resource allocation
12. capacity planning 13. Random sampling 14. Planned capacity
EX 2:
1. automobile plant 2. Steel making 3. Clothing manufacture 4. Aircraft
manufacture 5. Construction of a building
EX 3:
1.F 2.I 3.B 4.A 5.E 6.D 7.C 8.H 9.G
VII. UNIT REVIEW
1. Production and operations management obviously involves production plants and
factories or service branches, and the equipment in them, parts (raw materials or
supplies), processes (the steps by which production or services are carried out), and
planning and control systems (the procedures used by management to operate and
monitor the system)
2. Lean production: the production of goods and services with the minimum waste of
resources.
- Lean production can be achieved by: Kaizen, JIT, Cell production
3. Job production: the production of items one at a time.
Batch production: the production of goods in batches. Each batch passes through one
stage of production before moving onto the next stage.
Flow production: the production of very large quantities of identical goods using a
continuously moving process.
4. Job production: - Meet customers’ exact needs, Diversity of products >< Higher
production cost for each item, Only suitable for small-scale production, Require high-
skilled labour
Batch production: Save production costs, Small production amounts, Time-saving ><
Risks of inventories, Hard to produce a variety of products
Flow production: Low unit costs, Save time and money, Output can be produced quickly
>< Set up costs are expensive, Repetitive tasks -> worker’s low motivation
VIII. SUMMARIZE READING
1. Reading 1
- Objectives of the production management: produce a specific product, on schedule, at
minimum cost, producing the maximum possible volume of output, utilizing the plant or
the work force, reducing lead time
- Definition: Production and operations management obviously involves production
plants and factories or service branches, and the equipment in them, parts (raw materials
or supplies), processes (the steps by which production or services are carried out), and
planning and control systems (the procedures used by management to operate and
monitor the system) + involve people- the personnel
- decisions have to be made concerning its location, its size or capacity, the floor layout,
the hiring of staff, the purchase of equipment, the necessary level of inventory of parts
and finished products -> make accurate sale forecasting
2. Reading 2
- Lean production: the production of goods and services with the minimum waste of
resources
- Seven types of waste: Overproduction, Waiting, Transportation, Unnecessary inventory
Motion, Over-processing, Defects
- Lean production can be achieved by: Kaizen, JIT, Cell production
- Methods of production:
+ Job production: the production of items one at a time.
+ Batch production: the production of goods in batches. Each batch passes through one
stage of production before moving onto the next stage.
+ Flow production: the production of very large quantities of identical goods using a
continuously moving process