9.3. Operations strategy
A subsection of Business Studies, 9609, through 9. Operations management (A Level)
Listing 7 of 7 questions
Yondis Phones (YP) YP is a public limited company that manufactures mobile phones. YP’s phones are sold to large retailers who then brand them as their own products. YP uses a capital intensive flow production process. Computer aided manufacturing (CAM) and mass customisation allow YP to produce different designs of phone on the same production line. YP’s managers have differing opinions about the recent success of the company. The Operations Director, Khan, is pleased with the economies of scale from which YP benefits. However Jay, the Finance Director, is worried about the liquidity position. Table 2: Liquidity indicators Current assets including inventory ($000s) Current assets excluding inventory ($000s) Current liabilities ($000s) Current ratio 1.0 1.0 Acid test ratio 0.5 X YP has only sold phones to national retailers, but an opportunity has arisen to sell into another market, country A. A large retailer from country A would like to make regular purchases from YP. Khan knows that YP can increase production to meet this demand by introducing a new production line. However YP would also need to gain more international business to make this new production line profitable. Faye, the Marketing Director, has no experience of international markets and is concerned about the differences between marketing to national retailers compared to retailers in other countries. Define the term ‘capital intensive’ (line 3). Briefly explain the term ‘flow production’ (line 3). Refer to Table 2. Calculate the value of X. Briefly explain the changes in YP’s liquidity position. Analyse two economies of scale from which YP may benefit. Discuss the advantages and disadvantages to YP of selling phones to the retailer in country A.
9609_w16_qp_23
THEORY
2016
Paper 2, Variant 3
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Questions Discovered
7