TEST QUESTION - PAPER 1
TRF manufactures wooden furniture such as tables and chairs. It operates in a large factory and employs 120 workers. The business keeps low levels of inventory and uses just-in-time (JIT) production.
Environmental groups are concerned about the sourcing of wood used in production. The Operations Manager wants to improve productivity.
(a) Define ‘just-in-time (JIT) production’. [2]
(b) Identify two ways environmental groups might influence TRF. [2]
(c) State four benefits to a business of increasing productivity. [4]
(d) Explain one external cost and one external benefit that TRF may create. [6]
(e) Explain two factors TRF should consider when deciding whether to use labour-intensive or capital-intensive production.
Which factor is likely to be most important? Justify your answer. [6]
SPT is a large insurance company with offices in three countries. It employs 2,000 workers. The Chief Executive Officer wants to reorganise the business structure by reducing the number of management layers.
SPT currently has a tall organisational structure. Managers are encouraged to use different leadership styles depending on the situation.
(a) Define ‘organisational structure’. [2]
(b) Identify two leadership styles. [2]
(c) Outline two possible benefits to SPT of reducing management layers. [4]
(d) Explain two possible barriers to effective communication within SPT. [6]
(e) Do you think a flat organisational structure is always better than a tall structure?
Justify your answer. [6]
Aisha plans to leave her job to start a mobile car-washing business. She believes there is strong demand in her area. She has savings of $8,000 but is considering asking a friend to invest in the business.
Aisha intends to carry out market research before launching.
(a) Identify two sources of finance Aisha could use for her start-up. [2]
(b) Identify two methods of primary market research. [2]
(c) Outline two characteristics Aisha will need to be a successful entrepreneur. [4]
(d) Explain one advantage and one disadvantage to Aisha of forming a partnership instead of operating as a sole trader. [6]
(e) Do you think primary research is more useful than secondary research for a new business?
Justify your answer. [6]