7115_s15_qp_11
A paper of Business Studies, 7115
Questions:
4
Year:
2015
Paper:
1
Variant:
1
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1
Gomez is the manager of a small computer repair business. Table 1 shows some costs and prices for his business. As it is a competitive market, Gomez knows it is important to maintain customer loyalty and revenue. Gomez knows that a lower break-even point would help improve profits. He thinks the best way to lower the break-even point is to raise prices. Table 1: Cost and price information Price per customer $30 Variable cost per customer $20 Average number of customers per month Monthly fixed costs $1000 What is meant by ‘revenue’? What is meant by ‘variable cost’? Using the information in Table 1, draw a break-even chart for Gomez’s business. costs and revenue ($ per month) number of customers per month Identify and explain two methods that Gomez could use to maintain customer loyalty. Method 1: Explanation: Method 2: Explanation: Gomez thinks the best way to lower the break-even point is to raise prices. Do you agree? Justify your answer.
4. Operations management  →  4.2. Costs, scale of production and break-even analysis
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2
Country S is enjoying an economic boom. During this time, businesses have increased their profits and unemployment has fallen. The only problem is inflation. All Active is a private limited company. It owns 20 sport and fitness clubs in country S. The Managing Director said: ‘This is a good time to expand by opening 5 more clubs. Finding the right locations is important. We will need to recruit more employees.’ He cannot decide whether it would be an advantage for All Active to become a public limited company. Identify two stages of the recruitment process. Stage 1: Stage 2: What is meant by an ‘economic boom’? Explain how falling unemployment might affect All Active. Identify and explain two factors that All Active should consider when deciding on the location of the new clubs. Factor 1: Explanation: Factor 2: Explanation: Consider the advantages and disadvantages for All Active of being converted to a public limited company. Do you think All Active should become a public limited company? Justify your answer.
2. People in business  →  2.3. Recruitment, selection and training of employees
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3
Si and Ramon are friends. They want to set up a photography business. They would take pictures at weddings, birthdays and other special events. The business will be a partnership. Based on their primary market research, Si believes there is enough demand. Ramon has produced a business plan which shows they need $8000 for a shop and $4000 for equipment. They plan to spend $500 on promotion, but cannot agree on the best method to use. What is meant by a ‘partnership’? Identify two methods of primary market research that Si and Ramon might have used. Method 1: Method 2: Identify and explain two possible sources of finance that they could use to obtain the equipment. Source 1: Explanation: Source 2: Explanation: Identify and explain two advantages to Si and Ramon of having a business plan. Advantage 1: Explanation: Advantage 2: Explanation: Consider two methods of promotion that would be suitable for Si and Ramon to use. Which of these two methods would be the most appropriate? Justify your answer.
3. Marketing  →  3.2. Market research
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4
Javid is a company that manufactures a range of luxury chocolates using batch production. Over the past year, profit has fallen due to increased competition. In order to cut costs, the Finance Director has suggested the company introduces new technology into the production process. The Human Resources Director is not sure that workers would benefit from the introduction of new technology. What is meant by ‘batch production’? Identify two advantages (other than cutting costs) to the company of using new technology. Advantage 1: Advantage 2: Identify and explain two reasons why the quality of chocolates might be important to this company. Reason 1: Explanation: Reason 2: Explanation: Identify and explain two problems that a fall in profit might cause for the company. Problem 1: Explanation: Problem 2: Explanation: Do you think that the introduction of new technology would benefit Javid’s workers? Justify your answer.
4. Operations management  →  4.1. Production of goods and services
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