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Question 1 Report
Fig. 1 shows a simplified flow chart for a company that collects used smartphones, tests them, repairs suitable phones and sells them with a warranty. Phones that cannot be repaired are sent to a specialist recycler. The manager says the business must make a profit but also wants to reduce electronic waste.
(a) Identify the stage in Fig. 1 that adds value to a used smartphone before it is sold. [1]
(b) Explain one environmental objective of this business. [2]
(c) Explain one way offering a warranty could help the business increase sales. [2]
(d) Which stakeholder may benefit from the recycling stage? [1]
(e) Calculate the percentage of 240 collected phones that are repaired if 180 are suitable for repair. [2]
(f) Explain one reason why profit remains important to this business. [2]
(a) The value-adding stage is repairing suitable phones. Repair changes a used phone into a refurbished product that can be sold with greater value. [1]
(b) An environmental objective is to reduce electronic waste and prevent phones going to landfill. The business achieves this by repairing suitable phones and sending those that cannot be repaired to a specialist recycler. [2]
(c) A warranty gives customers confidence that faults will be dealt with. This reduces the perceived risk of buying a refurbished phone, so customers may be more willing to buy and sales may rise. [2]
(d) The local community may benefit from the recycling stage. Environmental groups, customers and the recycler are also acceptable stakeholders. [1]
(e) The percentage repaired is:
\[\frac{180}{240}\times100=75\%\]
75% of collected phones are repaired. [2]
(f) Profit remains necessary to pay operating costs, including collection, testing and staff. Profit also allows the business to continue operating and invest in further repairs, so its environmental objective can be sustained. [2]
(a) The value-adding stage is repairing suitable phones. Repair changes a used phone into a refurbished product that can be sold with greater value. [1]
(b) An environmental objective is to reduce electronic waste and prevent phones going to landfill. The business achieves this by repairing suitable phones and sending those that cannot be repaired to a specialist recycler. [2]
(c) A warranty gives customers confidence that faults will be dealt with. This reduces the perceived risk of buying a refurbished phone, so customers may be more willing to buy and sales may rise. [2]
(d) The local community may benefit from the recycling stage. Environmental groups, customers and the recycler are also acceptable stakeholders. [1]
(e) The percentage repaired is:
\[\frac{180}{240}\times100=75\%\]
75% of collected phones are repaired. [2]
(f) Profit remains necessary to pay operating costs, including collection, testing and staff. Profit also allows the business to continue operating and invest in further repairs, so its environmental objective can be sustained. [2]
Question 2 Report
A manufacturer of reusable water bottles uses computer-integrated manufacturing. A computer controls cutting, printing and packing machines during production. The production manager says that the system has changed the organisational structure because fewer supervisors are needed on the factory floor.
(a) Which type of production is most suitable for this computer-integrated manufacturing system? [1]
(b) Explain one possible disadvantage to employees of introducing this technology. [3]
(a) Mass production, flow production or continuous production is most suitable. Computer-integrated manufacturing is designed for repeated, high-volume production using linked automated processes. [1]
(b) Machines may take over tasks that production employees previously completed. [1] The manufacturer may therefore need fewer workers on the factory floor. [1] This can cause job losses, reduced job security or a need for employees to retrain for different roles. [1]
(a) Mass production, flow production or continuous production is most suitable. Computer-integrated manufacturing is designed for repeated, high-volume production using linked automated processes. [1]
(b) Machines may take over tasks that production employees previously completed. [1] The manufacturer may therefore need fewer workers on the factory floor. [1] This can cause job losses, reduced job security or a need for employees to retrain for different roles. [1]
Question 3 Report
When a premium furniture business starts selling dining tables in a new country, it finds that buyers expect smooth surfaces, accurate delivery dates and rapid responses to problems. The business currently inspects completed tables only after production. The operations manager is considering a total quality management approach, where every employee accepts responsibility for continuous improvement.
(a) What is meant by continuous improvement in this business? [1]
(b) Identify one customer expectation in the scenario. [1]
(c) Explain one difference between inspecting finished tables and using total quality management. [3]
(d) Explain whether total quality management is likely to increase the business's long-term profit. [5]
(a) Continuous improvement means ongoing efforts to make quality and business processes better over time. [1]
(b) One customer expectation is smooth table surfaces, accurate delivery dates or rapid responses to problems. [1]
(c) Inspecting completed tables finds defects after production has taken place. [1] Total quality management aims to prevent defects throughout the business and production process. [1] It also makes every employee responsible for improving quality. [1]
(d) Total quality management is likely to increase long-term profit. Fewer defects, returns and repairs reduce costs. [1] Consistent quality can improve the business’s reputation, [1] encouraging repeat purchases or allowing it to maintain a premium selling price. [1] Training staff and changing procedures may raise short-term costs, [1] but if improvements continue, increased sales and lower waste are likely to outweigh these costs. [1]
Exam focus: Total quality management is preventative and organisation-wide. It differs from simply inspecting finished output, which may find a defect only after resources have been used.
(a) Continuous improvement means ongoing efforts to make quality and business processes better over time. [1]
(b) One customer expectation is smooth table surfaces, accurate delivery dates or rapid responses to problems. [1]
(c) Inspecting completed tables finds defects after production has taken place. [1] Total quality management aims to prevent defects throughout the business and production process. [1] It also makes every employee responsible for improving quality. [1]
(d) Total quality management is likely to increase long-term profit. Fewer defects, returns and repairs reduce costs. [1] Consistent quality can improve the business’s reputation, [1] encouraging repeat purchases or allowing it to maintain a premium selling price. [1] Training staff and changing procedures may raise short-term costs, [1] but if improvements continue, increased sales and lower waste are likely to outweigh these costs. [1]
Exam focus: Total quality management is preventative and organisation-wide. It differs from simply inspecting finished output, which may find a defect only after resources have been used.
Question 4 Report
When a charity shop began accepting donated electrical items, its manager introduced a short course on checking plugs, recording stock and speaking to donors. Volunteers have different levels of experience, and some only work one morning each week. The manager needs training that is clear, low cost and easy to repeat for new volunteers.
(a) Identify one reason why volunteers need training before selling electrical items. [1]
(b) Explain one advantage of using a written training checklist. [2]
(c) Which one volunteer should receive extra support: a volunteer who has never checked an electrical item or a qualified electrician? [1]
(a) Volunteers need training so they can check that electrical items are safe, follow legal procedures, or record stock correctly. [1]
(b) A written checklist gives every volunteer the same steps to follow [1]. Training is therefore consistent and can be repeated easily when new volunteers join [1], which is especially useful when volunteers have different experience levels and work limited hours.
(c) The volunteer who has never checked an electrical item should receive extra support. [1] The qualified electrician already has relevant knowledge and skills.
(a) Volunteers need training so they can check that electrical items are safe, follow legal procedures, or record stock correctly. [1]
(b) A written checklist gives every volunteer the same steps to follow [1]. Training is therefore consistent and can be repeated easily when new volunteers join [1], which is especially useful when volunteers have different experience levels and work limited hours.
(c) The volunteer who has never checked an electrical item should receive extra support. [1] The qualified electrician already has relevant knowledge and skills.
Question 5 Report
Fig. 1 shows the entrance to a restaurant during the evening rush. The restaurant has a separate line for customers who booked a table and customers hoping to walk in. The manager is considering whether clearer signs would improve the customer experience and reduce arguments at the door.
(a) Identify which group should be directed to the left-hand queue in Fig. 1. [1]
(a) The left-hand queue is for booked guests, or customers with a reservation. [1]
The label and queue route on the left of the diagram identify this as the reservation queue. Clear signs would help customers join the correct line.
(a) The left-hand queue is for booked guests, or customers with a reservation. [1]
The label and queue route on the left of the diagram identify this as the reservation queue. Clear signs would help customers join the correct line.
Question 6 Report
Fig. 1 shows a courier employed by an independent meal-preparation business. The courier is about to leave a shared kitchen with several hot food orders. A supervisor notices that the delivery bag is balanced on the rear rack, but its fastening strap is hanging loose. The business wants customers to receive food in good condition and wants to avoid injury claims.
(a) Identify the unsafe feature of the delivery equipment shown in Fig. 1. [1]
(b) Explain one way this feature could affect the quality of food sold by the business. [2]
(c) Explain one action the supervisor could take to improve the safety of this job. [3]
(d) Which one of the following would most directly help the courier check that safety procedures are followed?
A induction training
B a customer loyalty card
C a price reduction
D a new restaurant menu [1]
(a) The delivery bag or box is not securely fastened to the bicycle: its strap is loose. [1]
(b) The unsecured bag could move or fall while the bicycle is travelling. [1] Food could spill, be damaged or arrive cold, so customers may judge the food quality poorly. [1]
(c) The supervisor should require the courier to fasten and check the strap before every journey. [1] A secured strap makes the bag less likely to fall or move. [1] This reduces the risk of injury and damaged orders. [1]
Providing a properly fitted, secured carrier is an equally valid action because it keeps the bag stable and reduces the chance of an accident.
(d) Induction training would most directly help the courier understand and follow the safety procedures. [1]
(a) The delivery bag or box is not securely fastened to the bicycle: its strap is loose. [1]
(b) The unsecured bag could move or fall while the bicycle is travelling. [1] Food could spill, be damaged or arrive cold, so customers may judge the food quality poorly. [1]
(c) The supervisor should require the courier to fasten and check the strap before every journey. [1] A secured strap makes the bag less likely to fall or move. [1] This reduces the risk of injury and damaged orders. [1]
Providing a properly fitted, secured carrier is an equally valid action because it keeps the bag stable and reduces the chance of an accident.
(d) Induction training would most directly help the courier understand and follow the safety procedures. [1]
Question 7 Report
What is meant by quality when Zara sells handmade school bags through her online business? Her customers expect strong stitching, accurate product descriptions and delivery on the promised date. Zara is considering using a cheaper zip supplier, but the zips have a higher failure rate.
(a) What does quality mean in this situation? [1]
(b) Explain one reason why Zara should consider customer expectations before changing supplier. [2]
(a) In this situation, quality means meeting customer requirements, or being fit for purpose. [1] The bags should have strong stitching and reliable zips, match their descriptions, and arrive when promised.
(b) Customers expect the zips to be reliable. [1] Using lower-quality zips could cause failures, complaints and fewer repeat purchases. [1]
Exam focus: A cheaper input is not necessarily better value if it makes the final product fail customer expectations.
(a) In this situation, quality means meeting customer requirements, or being fit for purpose. [1] The bags should have strong stitching and reliable zips, match their descriptions, and arrive when promised.
(b) Customers expect the zips to be reliable. [1] Using lower-quality zips could cause failures, complaints and fewer repeat purchases. [1]
Exam focus: A cheaper input is not necessarily better value if it makes the final product fail customer expectations.
Question 8 Report
A town council has received complaints about long waiting times for a bus service. The council owns the buses and pays drivers using money raised through local taxes. It is considering adding an evening route, even though this route may not make a profit.
(a) Which type of organisation operates the bus service? [1]
(b) Identify one source of finance mentioned in the information. [1]
(c) Explain why the council might run an unprofitable evening route. [1]
(a) The bus service is operated by a public-sector organisation. It is owned by the town council. [1]
(b) The source of finance mentioned is local taxes. [1]
(c) The council may run an unprofitable evening route to provide a service for residents and meet public needs. Public-sector organisations do not always make profit their main objective. [1]
(a) The bus service is operated by a public-sector organisation. It is owned by the town council. [1]
(b) The source of finance mentioned is local taxes. [1]
(c) The council may run an unprofitable evening route to provide a service for residents and meet public needs. Public-sector organisations do not always make profit their main objective. [1]
Question 9 Report
Fig. 1 shows the stages used by a business producing refillable pens. The manager is reviewing the organisational structure of the production department after customer complaints about leaking pens.
(a) Identify the stage labelled X. [1]
(b) Explain one reason why this stage should take place before packing. [1]
(c) Which production process is shown in Fig. 1? [1]
(d) Explain one benefit of this production process when demand for identical pens is high. [1]
(a) Stage X is quality control or quality inspection [1]. It checks whether the pen seal works correctly.
(b) Testing before packing means faulty leaking pens can be identified before they are sent to customers [1].
(c) The diagram shows flow production, also called mass production [1], because pens pass through the same fixed sequence of stages.
(d) Repeated stages enable a high output of standardised pens, and can lower unit costs [1]. This is especially useful when demand for identical pens is high.
(a) Stage X is quality control or quality inspection [1]. It checks whether the pen seal works correctly.
(b) Testing before packing means faulty leaking pens can be identified before they are sent to customers [1].
(c) The diagram shows flow production, also called mass production [1], because pens pass through the same fixed sequence of stages.
(d) Repeated stages enable a high output of standardised pens, and can lower unit costs [1]. This is especially useful when demand for identical pens is high.
Question 10 Report
A wildlife charity operates a visitor centre beside a wetland. Entry fees and donations pay for staff, while any surplus is used to restore habitats. The charity has decided not to sell advertising space to a company that would damage the wetland, despite being offered a high payment.
(a) Identify the main purpose of the charity. [1]
(b) Explain one reason why the charity may reject the advertising payment. [2]
(c) Which stakeholder is most likely to support habitat restoration: visitors or a competing advertising company? [1]
(d) What happens to surplus funds in this charity? [1]
(a) The charity's main purpose is to protect or restore wildlife habitats, which is an environmental and social aim rather than profit maximisation. [1]
(b) The advertising payment may be rejected because advertising for a company that damages the wetland would conflict with the charity's environmental mission. This could also reduce support from visitors and donors, who may expect the charity to protect the habitat. [2]
(c) Visitors are most likely to support habitat restoration, because a healthy wetland supports the purpose of their visit. [1]
(d) Surplus funds are reinvested in habitat restoration or other charity aims. A charity may need income to operate, but it uses any surplus to pursue its mission rather than distribute it to owners. [1]
(a) The charity's main purpose is to protect or restore wildlife habitats, which is an environmental and social aim rather than profit maximisation. [1]
(b) The advertising payment may be rejected because advertising for a company that damages the wetland would conflict with the charity's environmental mission. This could also reduce support from visitors and donors, who may expect the charity to protect the habitat. [2]
(c) Visitors are most likely to support habitat restoration, because a healthy wetland supports the purpose of their visit. [1]
(d) Surplus funds are reinvested in habitat restoration or other charity aims. A charity may need income to operate, but it uses any surplus to pursue its mission rather than distribute it to owners. [1]
Question 11 Report
Fig. 1 shows part of the supply chain used by a bicycle business based in the Netherlands. It sells finished bicycles in Canada. The manager is reviewing whether this global structure gives the business a cost advantage.
(a) Identify the country where bicycle assembly takes place. [1]
(b) Explain one reason why the business might buy steel from Turkey rather than from the Netherlands. [2]
(c) Explain one disadvantage of this global supply chain for the production manager. [2]
(d) Which one factor could delay delivery of steel to the assembly plant? [1]
(a) Bicycle assembly takes place in the Netherlands. [1]
(b) The business may buy steel from Turkey because Turkish steel may have a lower price or lower production cost. This reduces material costs for each bicycle, increasing profit or allowing the business to charge a lower selling price. [2]
(c) Steel must travel a longer distance to the Netherlands. A transport disruption or delay could therefore prevent assembly, reducing output and causing lost sales. [2]
(d) A port strike could delay steel delivery. Shipping delays, customs checks, severe weather and transport breakdowns are also acceptable. [1]
(a) Bicycle assembly takes place in the Netherlands. [1]
(b) The business may buy steel from Turkey because Turkish steel may have a lower price or lower production cost. This reduces material costs for each bicycle, increasing profit or allowing the business to charge a lower selling price. [2]
(c) Steel must travel a longer distance to the Netherlands. A transport disruption or delay could therefore prevent assembly, reducing output and causing lost sales. [2]
(d) A port strike could delay steel delivery. Shipping delays, customs checks, severe weather and transport breakdowns are also acceptable. [1]
Question 12 Report
Fig. 1 shows a supervisor observing workers assembling rechargeable lanterns. At each workstation, workers use the same written sequence and test the switch before passing the lantern to the next stage. The supervisor also asks workers to suggest changes that could prevent faults. This is part of a plan to build quality into production.
(a) Identify the approach to quality shown by using the same written sequence. [1]
(b) Explain one way involving workers in suggesting improvements can increase quality. [2]
(c) Which result would best show that the plan has worked: more rejected lanterns, fewer customer returns, a higher electricity bill, or fewer product designs? [1]
(d) Explain one possible benefit to profit if fewer lanterns need to be repaired. [2]
(a) Using the same written sequence is quality assurance, through standardised procedures. [1]
(b) Workers carry out the production job and may spot the causes of faults. [1] Their suggestions can therefore prevent errors and improve the production process. [1]
(c) The best evidence that the plan has worked is fewer customer returns. [1] This indicates that fewer faulty lanterns have reached customers.
(d) If fewer lanterns need repair, less labour and fewer materials are used on repair work. [1] This reduces costs and increases potential profit. [1]
Exam focus: Quality assurance aims to prevent faults by using reliable procedures throughout production, rather than only finding faults at the end.
(a) Using the same written sequence is quality assurance, through standardised procedures. [1]
(b) Workers carry out the production job and may spot the causes of faults. [1] Their suggestions can therefore prevent errors and improve the production process. [1]
(c) The best evidence that the plan has worked is fewer customer returns. [1] This indicates that fewer faulty lanterns have reached customers.
(d) If fewer lanterns need repair, less labour and fewer materials are used on repair work. [1] This reduces costs and increases potential profit. [1]
Exam focus: Quality assurance aims to prevent faults by using reliable procedures throughout production, rather than only finding faults at the end.
Question 13 Report
Read the information below about a food stall at a weekend market. Amir and Suki have each invested $3000. They will share the work, profit and business decisions. They are deciding whether to register as a partnership.
(a) Identify the proposed ownership structure. [1]
(b) Explain one benefit to Amir and Suki of using this structure. [2]
(a) The proposed ownership structure is a partnership. [1]
A partnership is owned by two or more people who agree to share aspects of the business, such as work, decisions, profits and losses. Amir and Suki are both investing and sharing these responsibilities.
(b) A benefit is that they can combine their capital. [1] Their combined investment can be used to buy more stock or better equipment than either might afford alone, which can increase the stall's production or selling capacity. [1]
Exam focus: Do not just state that partners “share money”. Explain what the larger combined amount enables the business to do.
(a) The proposed ownership structure is a partnership. [1]
A partnership is owned by two or more people who agree to share aspects of the business, such as work, decisions, profits and losses. Amir and Suki are both investing and sharing these responsibilities.
(b) A benefit is that they can combine their capital. [1] Their combined investment can be used to buy more stock or better equipment than either might afford alone, which can increase the stall's production or selling capacity. [1]
Exam focus: Do not just state that partners “share money”. Explain what the larger combined amount enables the business to do.
Question 14 Report
Explain what is meant by profit maximisation by referring to Oakline Furniture. The business makes wooden desks and has received a large order from a chain of offices. Its owner is considering longer production hours, higher selling prices and training new workers. Employees are concerned about workload and customers expect reliable quality.
(a) Explain what is meant by profit maximisation. [2]
(b) Identify one objective that supports profit maximisation. [1]
(c) Explain one possible disadvantage of extending production hours to meet the objective. [2]
(d) Which stakeholder may benefit most if profit increases? [1]
(a) Profit maximisation means seeking the highest possible difference between sales revenue and total costs. [1] It is an aim to earn as much profit as possible, not simply to increase sales, because sales may rise without profit rising if costs also rise. [1]
(b) An objective supporting profit maximisation is to reduce unit production costs by 8%. Increasing profit by a stated amount would also be valid. [1]
(c) Extending production hours may make workers tired. [1] Tired workers may make mistakes, reduce furniture quality, or become less motivated, potentially increasing costs or harming sales. [1]
(d) The owner or shareholders are most likely to benefit most from higher profit. [1]
(a) Profit maximisation means seeking the highest possible difference between sales revenue and total costs. [1] It is an aim to earn as much profit as possible, not simply to increase sales, because sales may rise without profit rising if costs also rise. [1]
(b) An objective supporting profit maximisation is to reduce unit production costs by 8%. Increasing profit by a stated amount would also be valid. [1]
(c) Extending production hours may make workers tired. [1] Tired workers may make mistakes, reduce furniture quality, or become less motivated, potentially increasing costs or harming sales. [1]
(d) The owner or shareholders are most likely to benefit most from higher profit. [1]
Question 15 Report
A software business plans to expand by selling its appointment-booking service to dental practices in three countries. The business will store more customer data and employ a new sales manager in each country. The owners want growth, but they also want to protect the business's reputation.
(a) Identify one stakeholder likely to be affected by this expansion. [1]
(b) Explain one reason why the business should invest in data security before expanding. [2]
(c) Explain one benefit of employing local sales managers in each new country. [3]
(a) Customers are one stakeholder affected by this expansion because the business will store more customer data. Employees, owners, dental practices and government would also be acceptable. [1]
(b) Expanding into three countries means storing more customer data, increasing the risk of data loss or misuse. A security failure could damage trust in the business and reduce future sales, so investment in security protects its reputation. [2]
(c) Local sales managers understand the language and business culture of their country. They can communicate more effectively with dental practices and adapt their sales approach to local expectations. This may help the business win contracts and increase sales in each new country. [3]
(a) Customers are one stakeholder affected by this expansion because the business will store more customer data. Employees, owners, dental practices and government would also be acceptable. [1]
(b) Expanding into three countries means storing more customer data, increasing the risk of data loss or misuse. A security failure could damage trust in the business and reduce future sales, so investment in security protects its reputation. [2]
(c) Local sales managers understand the language and business culture of their country. They can communicate more effectively with dental practices and adapt their sales approach to local expectations. This may help the business win contracts and increase sales in each new country. [3]
Question 16 Report
Fig. 1 shows the proposed organisational structure for a restaurant business that plans to open two new restaurants. The owner is deciding whether the structure will help managers control the larger business.
(a) Identify the manager who has direct responsibility for Restaurant B. [1]
(b) Explain one benefit of this organisational structure as the restaurant business expands. [2]
(c) Which manager is most likely to prepare budgets for the new restaurants? [1]
(a) The operations manager has direct responsibility for Restaurant B, as Restaurant B is below that manager in the organisational structure. [1]
(b) The structure clearly divides responsibilities: operations are managed by the operations manager and financial work by the finance manager. The owner can delegate these areas, making the larger business easier to control as new restaurants open. [2]
(c) The finance manager is most likely to prepare budgets for the new restaurants because budgets are financial plans. [1]
(a) The operations manager has direct responsibility for Restaurant B, as Restaurant B is below that manager in the organisational structure. [1]
(b) The structure clearly divides responsibilities: operations are managed by the operations manager and financial work by the finance manager. The owner can delegate these areas, making the larger business easier to control as new restaurants open. [2]
(c) The finance manager is most likely to prepare budgets for the new restaurants because budgets are financial plans. [1]
Question 17 Report
Amara manages a Nigerian furniture business that buys imported machinery. She receives a message that a new trade agreement will remove the import tax on the machinery next year. She is deciding whether to delay the purchase.
(a) Identify the tax that is expected to be removed. [1]
(b) Explain one likely effect of removing this tax on the business's production costs. [2]
(c) Which one decision could Amara make if she expects the machinery to become cheaper next year? [1]
(a) The tax expected to be removed is an import tariff, also called import duty. [1]
(b) Without the tariff, the machinery will cost less to import. This reduces the business’s capital cost, and potentially its production costs, which can increase profit if selling prices do not fall by the same amount. [2]
(c) Amara could delay buying the machinery until next year, when she expects it to be cheaper. [1]
(a) The tax expected to be removed is an import tariff, also called import duty. [1]
(b) Without the tariff, the machinery will cost less to import. This reduces the business’s capital cost, and potentially its production costs, which can increase profit if selling prices do not fall by the same amount. [2]
(c) Amara could delay buying the machinery until next year, when she expects it to be cheaper. [1]
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