Business 9225 | Paper 1 Mock 01 | Written Paper 1
Question 1 Report
Explain one way that customer feedback can help a business improve quality. A local bicycle-hire business gives visitors a short online survey after each hire. Several visitors state that the brakes on some bicycles feel loose. The manager must decide what action to take before the busy holiday weekend.
(a) Which source of information has identified the possible quality problem? [1]
(b) Explain one action the manager could take to improve the quality of the bicycles. [2]
(a) The possible quality problem was identified through customer feedback in the online survey. [1]
(b) The manager should inspect and adjust or repair the brakes. [1] This makes the bicycles safer and helps them meet the standard customers expect. [1]
Exam focus: Feedback is useful only when the business uses it to identify a specific problem and take corrective action.
Answer Details
(a) The possible quality problem was identified through customer feedback in the online survey. [1]
(b) The manager should inspect and adjust or repair the brakes. [1] This makes the bicycles safer and helps them meet the standard customers expect. [1]
Exam focus: Feedback is useful only when the business uses it to identify a specific problem and take corrective action.
Question 2 Report
When a car-parts factory releases carbon dioxide, the local government charges an environmental levy of $12 for each tonne emitted. The factory currently emits 850 tonnes each year. A new machine would reduce emissions by 150 tonnes, but would not change the organisational structure of the business.
(a) Calculate the annual levy paid before the new machine is installed. [1]
(b) Explain one environmental benefit of installing the new machine. [2]
(a) [1] Calculate the levy from tonnes emitted multiplied by the charge per tonne:
\[850 \times \$12 = \$10\,200\]
The annual levy before installation is $10 200.
(b) [2] The machine reduces carbon dioxide emissions. Therefore, the factory makes a smaller contribution to climate change or air pollution.
Answer Details
(a) [1] Calculate the levy from tonnes emitted multiplied by the charge per tonne:
\[850 \times \$12 = \$10\,200\]
The annual levy before installation is $10 200.
(b) [2] The machine reduces carbon dioxide emissions. Therefore, the factory makes a smaller contribution to climate change or air pollution.
Question 3 Report
When a customer telephones Alina's online craft shop, the call is currently answered by whichever worker is free. A mystery shopper found that the customer had to repeat an address query to three different employees. Alina is reviewing the organisational structure as the business grows and appoints one employee to deal with delivery enquiries.
(a) Which job title best describes this employee's role? [1]
(a) This employee is a customer service adviser or customer service representative. [1]
Giving one employee responsibility for delivery enquiries means customers are more likely to receive a consistent answer instead of being passed between several workers.
Answer Details
(a) This employee is a customer service adviser or customer service representative. [1]
Giving one employee responsibility for delivery enquiries means customers are more likely to receive a consistent answer instead of being passed between several workers.
Question 4 Report
A cosmetics producer is launching a new face cream. It needs glass jars with lids that do not leak during delivery. Procurement has found a supplier offering recycled jars, but its minimum order is 30 000 units. Forecast sales for the first three months are only 12 000 jars. The owner wants to avoid holding excessive stock.
(a) What is meant by a minimum order quantity? [1]
(b) Explain one problem caused by ordering 30 000 jars for this launch. [2]
(c) Which one of the following should be tested before the business selects the jar supplier: whether lids leak, the colour of office walls, employee job descriptions, or social-media followers? [1]
(a) A minimum order quantity is the smallest quantity that a supplier will accept in one order. [1]
(b) Ordering 30 000 jars when forecast sales are 12 000 means the business will hold many unused jars. [1] This ties up cash, uses storage space and risks obsolete stock if sales are lower than forecast. [1]
(c) The business should test whether the lids leak, because jars and lids must protect the face cream during delivery. [1]
Answer Details
(a) A minimum order quantity is the smallest quantity that a supplier will accept in one order. [1]
(b) Ordering 30 000 jars when forecast sales are 12 000 means the business will hold many unused jars. [1] This ties up cash, uses storage space and risks obsolete stock if sales are lower than forecast. [1]
(c) The business should test whether the lids leak, because jars and lids must protect the face cream during delivery. [1]
Question 5 Report
Fig. 1 shows a mobile coffee trailer used by North Quay Coffee at weekend markets. The owners are deciding whether their main aim should be business growth or improving the quality of service. They have noticed that queues are long at busy times and that some customers leave before buying a drink.
(a) Identify one objective that would support an aim to improve service quality. [1]
(b) Explain one way achieving this objective could increase profit. [2]
(c) Which stakeholder may be dissatisfied if the owners employ fewer workers to cut costs? [1]
Labelled answer diagram:
(a) A suitable service-quality objective is to serve 90% of customers within five minutes. Reducing average waiting time or reducing incorrect orders would also be valid because each gives a clear focus for improving customers' experience. [1]
(b) Faster service means that fewer customers leave the queue before buying a drink. [1] More completed purchases increase sales revenue and can increase profit, provided that the cost of improving service does not rise by more than the extra revenue. [1]
(c) Employees or workers may be dissatisfied. Employing fewer people may reduce wage costs, but it can mean fewer jobs or more work for remaining staff. [1]
Answer Details
Labelled answer diagram:
(a) A suitable service-quality objective is to serve 90% of customers within five minutes. Reducing average waiting time or reducing incorrect orders would also be valid because each gives a clear focus for improving customers' experience. [1]
(b) Faster service means that fewer customers leave the queue before buying a drink. [1] More completed purchases increase sales revenue and can increase profit, provided that the cost of improving service does not rise by more than the extra revenue. [1]
(c) Employees or workers may be dissatisfied. Employing fewer people may reduce wage costs, but it can mean fewer jobs or more work for remaining staff. [1]
Question 6 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]
Answer Details
(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 7 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.
Answer Details
(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 8 Report
Fig. 1 shows an organisational structure for a company producing reusable water bottles. The production manager has a direct line of authority to the factory supervisor. The human resources manager advises both managers about recruitment and training, but does not give production instructions to factory workers.
(a) Identify the manager with direct line authority over the factory supervisor. [1]
(b) What is meant by line authority? [2]
(c) Explain one benefit to the business of using the HR manager as a specialist adviser. [3]
(d) Which one of the following is a likely responsibility of the HR manager: setting daily production targets, selecting new employees, or repairing bottle moulds? [1]
(e) Explain one reason why the factory supervisor should still have authority over production staff. [3]
(a) The production manager has direct line authority over the factory supervisor. [1]
(b) Line authority is the right to give instructions [1] to employees lower down the organisational structure [1].
(c) The HR manager has specialist knowledge of recruitment or training [1]. This supports better selection or development of employees [1], which can improve staff performance or reduce labour turnover [1]. The HR manager advises rather than directs factory production.
(d) Selecting new employees is a likely HR-manager responsibility. [1]
(e) The factory supervisor is close to daily factory work [1], so instructions can be given quickly [1]. This helps production targets and quality standards to be met [1].
Answer Details
(a) The production manager has direct line authority over the factory supervisor. [1]
(b) Line authority is the right to give instructions [1] to employees lower down the organisational structure [1].
(c) The HR manager has specialist knowledge of recruitment or training [1]. This supports better selection or development of employees [1], which can improve staff performance or reduce labour turnover [1]. The HR manager advises rather than directs factory production.
(d) Selecting new employees is a likely HR-manager responsibility. [1]
(e) The factory supervisor is close to daily factory work [1], so instructions can be given quickly [1]. This helps production targets and quality standards to be met [1].
Question 9 Report
What is one likely effect on a UK clothing business when a rival begins importing lower-cost jackets produced in Bangladesh? The UK business has higher wage costs and has been selling similar jackets through local department stores for five years.
(a) Identify one source of competitive pressure created by globalisation in this case. [1]
(b) Explain one possible response the UK business could make to protect its sales. [2]
(a) The competitive pressure is competition from imported lower-priced jackets, made by overseas producers with lower costs. [1]
(b) The UK business could differentiate its jackets through better design or higher quality. [1] Customers may then choose its jackets despite their higher price. [1]
Alternatively, it could reduce production costs so that it can lower its selling price and compete more directly. [2]
Exam focus: A response must address why sales are threatened: the rival can charge less because its production costs are lower.
Answer Details
(a) The competitive pressure is competition from imported lower-priced jackets, made by overseas producers with lower costs. [1]
(b) The UK business could differentiate its jackets through better design or higher quality. [1] Customers may then choose its jackets despite their higher price. [1]
Alternatively, it could reduce production costs so that it can lower its selling price and compete more directly. [2]
Exam focus: A response must address why sales are threatened: the rival can charge less because its production costs are lower.
Question 10 Report
Fig. 1 shows a simplified layout at a business that produces custom aluminium window frames. A frame moves only when the previous stage has been completed. The manager is considering adding a second cutting machine because the cutting stage is slower than the other stages.
(a) Identify the bottleneck shown in Fig. 1. [1]
(b) Explain one likely effect of this bottleneck on the following stages. [2]
(c) Calculate the percentage increase in cutting capacity if output rises from 80 frames to 100 frames per day. [2]
(d) Explain one reason why quality checks should remain after capacity is increased. [2]
(e) Which production process is most likely shown by the layout? [1]
(a) The bottleneck is cutting lengths [1], because this stage is slower than the other stages.
(b) The later drilling, assembly and checking stages may have to wait for frames from cutting and be underused [1]. This delays production and reduces total output [1].
(c)
\[\text{Increase}=100-80=20\text{ frames per day}\]
\[\text{Percentage increase}=\frac{20}{80}\times100=25\%\]
The cutting capacity increases by 25% [2].
(d) Faster production may create defects or make defects less likely to be noticed [1]. Quality checks prevent faulty window frames reaching customers and protect the business's reputation [1].
(e) The layout is most likely flow production [1], since frames move through a fixed sequence of stages.
Answer Details
(a) The bottleneck is cutting lengths [1], because this stage is slower than the other stages.
(b) The later drilling, assembly and checking stages may have to wait for frames from cutting and be underused [1]. This delays production and reduces total output [1].
(c)
\[\text{Increase}=100-80=20\text{ frames per day}\]
\[\text{Percentage increase}=\frac{20}{80}\times100=25\%\]
The cutting capacity increases by 25% [2].
(d) Faster production may create defects or make defects less likely to be noticed [1]. Quality checks prevent faulty window frames reaching customers and protect the business's reputation [1].
(e) The layout is most likely flow production [1], since frames move through a fixed sequence of stages.
Question 11 Report
Fig. 1 shows how a regional furniture retailer plans to grow. It will buy a smaller furniture retailer that sells similar products in the same country. Both businesses sell sofas, tables and beds to households.
(a) Identify the type of external growth shown in Fig. 1. [1]
(b) Explain one benefit of this type of growth for Oakline Furniture. [2]
(c) Which business is most likely to lose its separate identity after the purchase? [1]
(d) Explain one possible problem caused by the growth. [1]
(a) This is horizontal integration, also called a horizontal merger or takeover. Both businesses sell similar furniture products at the same stage of production and distribution. [1]
(b) Oakline gains HomeNest’s customers and outlets. It can therefore increase its market share and sales more quickly than if it had to open and establish new stores itself. [2]
(c) HomeNest Furniture is most likely to lose its separate identity after being purchased by Oakline. [1]
(d) Staff and managers from the two businesses may have different ways of working. This can cause conflict while the businesses are integrated. [1]
Answer Details
(a) This is horizontal integration, also called a horizontal merger or takeover. Both businesses sell similar furniture products at the same stage of production and distribution. [1]
(b) Oakline gains HomeNest’s customers and outlets. It can therefore increase its market share and sales more quickly than if it had to open and establish new stores itself. [2]
(c) HomeNest Furniture is most likely to lose its separate identity after being purchased by Oakline. [1]
(d) Staff and managers from the two businesses may have different ways of working. This can cause conflict while the businesses are integrated. [1]
Question 12 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.
Answer Details
(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 13 Report
A growing online business, Pawsome Pantry, sells dried dog food in reusable metal tubs. Its operations manager expects demand to rise sharply after a social-media campaign. A local manufacturer offers 12 000 tubs at $1.80 each and can replenish stock weekly. An overseas manufacturer offers 30 000 tubs at $1.35 each, but requires payment before production and delivery takes eight weeks. The business has limited storage space and does not want cash tied up in unsold stock.
(a) Calculate the purchase cost of 12 000 tubs from the local manufacturer. [2]
(b) Identify one reason why the overseas manufacturer may have lower unit costs. [2]
(c) Explain one benefit to Pawsome Pantry of ordering from the local manufacturer. [3]
(d) Which manufacturer should the operations manager choose? Explain your answer using the information provided. [5]
(a)
\[12\,000\times\$1.80=\$21\,600\]
The purchase cost from the local manufacturer is \$21 600. [2]
(b) The overseas manufacturer produces a larger quantity, so it may gain economies of scale. [1] For example, fixed production costs can be spread over more tubs or materials can be bought in bulk. [1]
(c) Weekly replenishment means Pawsome Pantry can order tubs closer to when they are needed. [1] This reduces the quantity held in its limited storage space. [1] It also releases cash for other activities and lowers the risk of holding unsold tubs. [1]
(d) The local manufacturer is the stronger choice on the information given. The overseas order is 30 000 tubs, which is difficult to store when the business has limited space. [1] Weekly deliveries reduce stockholding and cash-flow pressure. [1] The local supplier does not require advance payment, reducing financial risk. [1] Weekly replenishment also lets the business respond if demand after the campaign changes. [1] Although the overseas price is lower, its eight-week lead time and advance payment increase risk. Therefore, the local supplier better meets the stated needs for flexibility, storage control and avoiding cash tied up in stock. [1]
A conclusion in favour of the overseas manufacturer could also be credited if it is supported by the lower unit price and expected strong demand, while recognising the eight-week lead time, advance payment and storage implications. [5]
Answer Details
(a)
\[12\,000\times\$1.80=\$21\,600\]
The purchase cost from the local manufacturer is \$21 600. [2]
(b) The overseas manufacturer produces a larger quantity, so it may gain economies of scale. [1] For example, fixed production costs can be spread over more tubs or materials can be bought in bulk. [1]
(c) Weekly replenishment means Pawsome Pantry can order tubs closer to when they are needed. [1] This reduces the quantity held in its limited storage space. [1] It also releases cash for other activities and lowers the risk of holding unsold tubs. [1]
(d) The local manufacturer is the stronger choice on the information given. The overseas order is 30 000 tubs, which is difficult to store when the business has limited space. [1] Weekly deliveries reduce stockholding and cash-flow pressure. [1] The local supplier does not require advance payment, reducing financial risk. [1] Weekly replenishment also lets the business respond if demand after the campaign changes. [1] Although the overseas price is lower, its eight-week lead time and advance payment increase risk. Therefore, the local supplier better meets the stated needs for flexibility, storage control and avoiding cash tied up in stock. [1]
A conclusion in favour of the overseas manufacturer could also be credited if it is supported by the lower unit price and expected strong demand, while recognising the eight-week lead time, advance payment and storage implications. [5]
Question 14 Report
Which one of the following is a possible advantage to a supermarket in Ghana of importing fruit from several countries? The supermarket wants to offer food throughout the year, although local mango production falls sharply during part of the rainy season.
(a) Identify one country that could be described as an overseas source of supply. [1]
(b) Explain one benefit of using suppliers in several countries. [2]
(c) What could happen to sales if the supermarket has empty fruit shelves? [1]
(a) An overseas source of supply is any country outside Ghana, such as Spain, Egypt or South Africa. [1]
(b) Using several countries as suppliers reduces dependence on one source. If fruit supply is disrupted in one country, the supermarket can obtain fruit from another, helping it keep shelves stocked and maintain customer sales throughout the year. [2]
(c) If fruit shelves are empty, sales may decrease because customers may buy fruit from competitors instead. [1]
Answer Details
(a) An overseas source of supply is any country outside Ghana, such as Spain, Egypt or South Africa. [1]
(b) Using several countries as suppliers reduces dependence on one source. If fruit supply is disrupted in one country, the supermarket can obtain fruit from another, helping it keep shelves stocked and maintain customer sales throughout the year. [2]
(c) If fruit shelves are empty, sales may decrease because customers may buy fruit from competitors instead. [1]
Question 15 Report
Read the information about Arctic Spoon, a business producing chilled soups for restaurants.
During a routine quality check, a manager finds that several tubs have loose lids. The tubs cannot be sold because food may leak during delivery. The production manager records the loss before deciding whether extra staff training is needed.
(a) Identify which one of the following is a cost of poor quality for Arctic Spoon. [1]
A. Income received from selling soup to a new restaurant
B. Money spent replacing soup tubs rejected by a customer
C. Profit earned after the business increases its selling price
D. Payment received from a supplier for returning unused ingredients
(a) A cost of poor quality is money spent replacing soup tubs rejected by a customer. [1]
Rejected tubs must be replaced because of the loose lids, so the business incurs an extra cost caused by a quality failure. Income, profit and payments received are not costs of poor quality.
Answer Details
(a) A cost of poor quality is money spent replacing soup tubs rejected by a customer. [1]
Rejected tubs must be replaced because of the loose lids, so the business incurs an extra cost caused by a quality failure. Income, profit and payments received are not costs of poor quality.
Question 16 Report
A manufacturer of emergency torches has been asked to supply 30 000 units to a relief organisation within two months. Its manager can use existing workers on overtime, recruit temporary workers, or introduce an automated battery-fitting machine. The business has sufficient factory space, but the machine would require staff training and a large initial payment.
(a) Identify one fixed cost of buying the automated machine. [1]
(b) Explain one advantage of automation for this order. [2]
(c) Explain one disadvantage of automation for the business's workers. [2]
(d) Calculate the output per day needed to make 30 000 torches in 50 production days. [1]
(e) Which production process is likely to be used for this large order of identical torches? [1]
(f) Explain one reason why quality control is important for emergency torches. [1]
(a) A fixed cost is the purchase or installation cost of the automated machine [1]. This cost is incurred even if output later changes.
(b) The machine can fit batteries quickly and consistently [1]. This increases output or reduces unit labour costs when producing a large order of identical torches [1].
(c) Workers may need retraining or some jobs may be lost [1]. This can reduce morale or create redundancy costs for the business [1].
(d)
\[\text{Required output per day}=\frac{30000\text{ torches}}{50\text{ production days}}=600\text{ torches per day}\]
600 torches per day [1].
(e) A large order of identical torches is likely to use flow production or mass production [1].
(f) Quality control is important because a faulty torch may fail in an emergency, harming customers and damaging the business's reputation [1].
Answer Details
(a) A fixed cost is the purchase or installation cost of the automated machine [1]. This cost is incurred even if output later changes.
(b) The machine can fit batteries quickly and consistently [1]. This increases output or reduces unit labour costs when producing a large order of identical torches [1].
(c) Workers may need retraining or some jobs may be lost [1]. This can reduce morale or create redundancy costs for the business [1].
(d)
\[\text{Required output per day}=\frac{30000\text{ torches}}{50\text{ production days}}=600\text{ torches per day}\]
600 torches per day [1].
(e) A large order of identical torches is likely to use flow production or mass production [1].
(f) Quality control is important because a faulty torch may fail in an emergency, harming customers and damaging the business's reputation [1].
Question 17 Report
A new restaurant is recruiting kitchen employees before opening. The owner plans an induction programme that includes food-safety rules, a tour, meeting colleagues and an explanation of how tips are shared. The owner believes this can affect motivation from the first week.
(a) What is induction training? [1]
(b) Explain one way induction can reduce employee anxiety in a new job. [2]
(c) Identify one item of information about the business that should be included in induction. [1]
(d) Which outcome is most likely when employees understand food-safety procedures: more waste, fewer accidents, lower quality, or slower communication? [1]
(e) Explain one reason why fair sharing of tips may motivate kitchen employees. [1]
(a) Induction training is training or orientation provided to new employees when they join a business. [1]
(b) Induction explains rules, job duties and where employees can get help. This makes a new employee feel more confident and secure, reducing anxiety. [2]
(c) One appropriate item is health and safety procedures, including food-safety rules. Job duties, business rules, organisational structure and pay arrangements are also acceptable. [1]
(d) Understanding food-safety procedures is most likely to result in fewer accidents. [1]
(e) Fair sharing of tips can motivate kitchen employees because they see the reward as fair and feel valued for their contribution. [1]
Answer Details
(a) Induction training is training or orientation provided to new employees when they join a business. [1]
(b) Induction explains rules, job duties and where employees can get help. This makes a new employee feel more confident and secure, reducing anxiety. [2]
(c) One appropriate item is health and safety procedures, including food-safety rules. Job duties, business rules, organisational structure and pay arrangements are also acceptable. [1]
(d) Understanding food-safety procedures is most likely to result in fewer accidents. [1]
(e) Fair sharing of tips can motivate kitchen employees because they see the reward as fair and feel valued for their contribution. [1]
