bus as u2 nir answers launch

8/18/2019 Bus as u2 Nir Answers Launch

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Chapter 16: Using budgets

Case study, page 116

1 U = £251,000

2 V = £5,000 Adverse W = £2,000 Favourable X = £26,000 Adverse

Y = £4,000 Favourable

3 Sales revenue variance sales level lo!er "#an e$%ec"ed& sellin' %rice lo!er "#an e$%ec"ed

a) (abour cos" variance )ore labour #ours needed "o %roduce 'oods or services "#an bud'e"ed *or&

#i'#er labour cos"s %er #our "#an bud'e"ed+

Case study: Variance analysis highlights problems

at Highcroft, page 118

1 X = Adverse Y = 1 Favourable - = 1 Adverse

2 ." !ould be a )is"a/e "o se" bud'e"s *or one ear !i"#ou" )oni"orin' %er*or)ance "#rou'#ou" "#e

ear e+'+ b calcula"in' variances ever )on"#+ #ese variances !ill 'uide )ana'e)en" decision

)a/in' and "#ese decisions could lead "o a correc"ion o* "#e adverse variances+ So, *or e$a)%le, i*

*ood and drin/ variances !ere al!as adverse a decision could be "a/en "o source c#ea%er su%%lies

"#ere could o* course be conse3uences "o "#is+ .n addi"ion, i* "#e variances are ver bi' and caused

b e$"ernal *ac"ors beond )ana'e)en" con"rol i" )i'#" be )ore )o"iva"in' "o s"a**, and )ore

realis"ic, i* "#e bud'e"s !ere a)ended "o "a/e "#ese *ac"ors in"o accoun"+

3 Sales revenue variance "#e #o"el )i'#" #ave been *orced "o lo!er avera'e roo) ra"es because o*

!ea/er "#an e$%ec"ed de)and+ ven i* "#is decision !as no" "a/en, %ro)o"ional ca)%ai'ns bco)%e"i"ors )i'#" lead "o lo!er "#an *orecas" 'ues" nu)bers+ #e recession in 200 is #i""in'

so)e #o"el 'rou%s 3ui"e #ard+

a) Food and drin/ variance cos"s *ro) su%%liers )a #ave risen *as"er "#an !as bud'e"ed *or& "#ere

could #ave been )ore !as"a'e o* *ood "#an nor)al 7 "#is could be a s"a** "rainin' %roble) "#a"

needs "o be addressed+

4 Sales revenue increase %ro)o"ion e+'+ abroad "o encoura'e *orei'n "ouris"s as %ound #as *allen,

reduce roo) ra"es, s%ecial o**ers e+'+ all inclusive %ac/a'es& an o"#er relevan" and a%%lied

su''es"ion+ Analsis s#ould be s#o!n e$%lainin' #o! eac# su''es"ion )i'#" increase sales

revenue+ So)e )i'#" su''es" #i'#er roo) ra"es i* "#e ar'ue "#a" de)and )i'#" be %rice inelas"ic8

valua"ion o* su''es"ions )i'#" include cos" o* %ro)o"ions& ac"ions o* co)%e"i"ors )i'#" cancel

ou" "#e bene*i"s o* an decision )ade& elas"ici" o* de)and+ Food and drin/ s"a** "rainin' "o reduce !as"a'e and "o allo! *or c#ea%er *ood su%%lies "o be "urned

in"o e**ec"ive )enu i"e)s& use c#ea%er su%%liers e+'+ avoid usin' or'anic su%%liers& analsis o* #o!

"#ese su''es"ions could reduce cos"s+ valua"ion )i'#" include )o"iva"ion and su%%or" o* s"a**

essen"ial in order "o cu" cos"s& c#ea%er *ood and drin/ su%%lies )i'#" lead "o lo!er 3uali" and

reduce 'ues" loal" in lon' "er)+

AQA Business Studies AS Level © Nelson Thornes Ltd 2009 1

Unit 2

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Chapter 17: Improing cash flo!

Case study: It doesn"t gro! on trees, page 1#$

1 W#en a business *inds i" increasin'l di**icul" "o %a *or da "o da e$%enses or "o %a i"s credi"ors

cas# in*lo! does no" )a"c# cas# ou"*lo!+

2 $%endi"ure increased !i"# "#e ra%id e$%ansion o* "#e business+ 9as# recei%"s *ro) cus"o)ers !ere

slo!er "#an e$%ec"ed+

3 #e business is no! des%era"e "o raise cas# as i" did no" %lan *or i"s cas# *lo! needs 7 "#e o!ner

see)ed "o be "oo /een "o e$%and !i"#ou" considerin' "#e conse3uences+ ." )a be *orced "o acce%"

an overdra*" !#ic# #as #i'# in"eres" cos"s and can be called bac/ i* "#e ban/ beco)es concerned

abou" "#e viabili" o* "#e business+ ." )a be *orced "o sell asse"s "o lease "#e) bac/ "#is increases

*i$ed leasin' cos"s or use *ac"orin' services !#ic# !ill no" %a 100: o* "#e "o"al value o* deb"s+

#e %ro*i"abili" o* "#e business !ill be adversel a**ec"ed b all o* "#ese o%"ions+4 valua"ion )i'#" include "#in's li/e sale and leasebac/, reducin' "#e value o* "#e business a" "#e

"i)e "#a" "#e o!ner !as "rin' "o e$%and i"+ (easin' c#ar'es !ill be %aable in "#e lon' "er) 7 all

"#e "i)e "#e business needs "o use "#ese asse"s+ ." )i'#" be be""er "o *ac"or "#e deb"s, !#ic# involves

s#or" "er) %ain 20: o* deb"s no" %aid b *ac"orin' co)%an bu" "#e value o* "#e business !ill no"

be a**ec"ed in "#e lon'er "er) and "#ere !ill be no lon'er "er) cos"s "o %a *or+ ;o!ever, i" !ould

be be""er *or "#e business i* "#e o!ner could %u" )ore o* #is o!n ca%i"al in+


Unit 2

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Chapter 18: %easuring and increasingprofit

&ctiity, page 1#8

1


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3 Ge*ini"ion o* bo"# "er)s+ 1 )ar/ eac# He %oin" is "#a" an adverse cos" variance is one "#a"

reduces %ro*i" *ro) "#e bud'e"ed *i'ure so actual costs )us" #ave been #i'#er "#an budgeted costs.

4 Ge*ini"ion o* bo"# "er)s+ 1 )ar/ eac# He %oin" is "#a" an adverse revenue variance is one "#a"

reduces %ro*i" *ro) bud'e"ed *i'ure so actual revenue )us" #ave been lo!er "#an budgeted revenue+

5 X = £@5,000 Adverse& Y = £20,000 Favourable& - = £0,000 Adversea) S"uden" ans!er based on "e$"boo/+ >o"e "#a" sales revenue variance is *avourable so #i'#er sales

levels !ould #el% "o e$%lain "#e #i'#er "#an bud'e"ed labour and )a"erial cos"s+

b) S"uden"sB ans!er could be su%%or"ed b "#e calcula"ion o* "#e %ro*i" variance *or "#is "i)e %eriod

*ro) "#e da"a 'iven £@5,000 Favourable+ #is s#o!s "#a" "#e business #as %er*or)ed be""er

"#an e$%ec"ed or bud'e"ed and "#is can #el% in*or) or in*luence "#e bud'e"s *or "#e ne$" "i)e

%eriod+ #is #el%s in )oni"orin', con"rollin' and )o"iva"in' s"a** and o%era"ions o* "#e business+

valua"ion based on "e$"boo/ %oin"s+ 2 )ar/s *or %oin"s su''es"ed, 2 )ar/s *or a%%lica"ion "o

da"a e+'+ calcula"ion o* %ro*i"s variance, 2 )ar/s *or analsis o* %oin"s, 2 )ar/s *or evalua"ion

6 >eed "o iden"i* i* i" is a lo!er "#an bud'e"ed %rice or a lo!er "#an bud'e"ed sales level "#a" is "#e

)aDor cause o* "#e adverse sales revenue variance+ Iusiness can raise %rice 7 bu" "#is )a cause

sales level "o *all even *ur"#er& lo!er %rice "o increase sales level 7 de%ends on de)andres%onsiveness elas"ici"& increase %ro)o"ion 7 e$"ra cos" o* "#is )a no" be ou"!ei'#ed b sales

revenue increase+ 1 )ar/ *or eac# su''es"ion %lus 2 )ar/s *or e$%lainin' eac# %oin"

7 Ge*ine or e$%lain cas# *lo! %roble)s+ 2 )ar/s (o!er "#an e$%ec"ed sales& no cas# *orecas"in'&

deb"ors slo!er "o %a "#an e$%ec"ed& une$%ec"ed cas# e$%enses& car su%%liers de)and 3uic/er

%a)en"+ 1 )ar/ *or eac# su''es"ion %lus 1 )ar/ eac# *or so)e e$%lana"ion

8 e" %ro*i" )ar'in

,5

4 100 = 11+42:

42

, × 100 = 7.14%

Return on caita!

25

4 × 100 = 16%

25

, × 100 = 12%

a) Sales #ave risen be"!een "#e "!o ears bu" ne" %ro*i" #as *allen 7 #ence "#e *all in "#e ne" %ro*i"

)ar'in+


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c) #e ne! re"urn on ca%i"al !ill beco)e0

5 100 = 16+6?:+ So, i" a%%ears "o increase "#e

%ro*i"abili" o* "#e business, once i" is u% and runnin'+ ." is no" clear #o! lon' "#is !ill "a/e,

"#ou'#+ )ar/s *or ne! calcula"ion and )ar/s *or co))en"

") Caise %rices 7 bu" !ould be "#e i)%ac" on de)andE (o!er variable cos"s o* )a"erials 7 bu" !#a"is "#e i)%ac" on 3uali" and i)a'e *or "#is business in %ar"icularE (o!er labour cos"s e+'+ #i'#er

%roduc"ivi" or lo!er !a'e ra"es 7 bu" !#a" is "#e i)%ac" on )o"iva"ion and 3uali"E (o!er

over#ead cos"s 7 "#e evalua"ion de%ends on !#ic# one is su''es"ed b s"uden"+ Ce"urn on ca%i"al

e)%loed Co9 could be increased b sellin' redundan" asse"s and inves"in' %roceeds )ore

%ro*i"abl 7 bu" !ill "#ese asse"s be needed in "#e *u"ure b "#is *as" e$%andin' businessE 2

)ar/s *or su''es"ions, 2 )ar/s *or a%%lica"ion "o "#is business, 2 )ar/s *or analsis o* #o!

su''es"ions )i'#" increase %ro*i"abili", 2 )ar/s *or evalua"ion


Unit 2

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Chapter 1: Improing organisationalstructures

Case study: /ighams, page 10#

1 Ge*ine levels o* #ierarc# Ii'#a)s #as *e! levels o* #ierarc# as 9#arlie believes in a #andsK

on a%%roac#+

a) Ge*ine s%an o* con"rol i" is 3ui"e !ide in Ii'#a)s as eac# )ana'er is res%onsible *or all

e)%loees in "#eir areaB+

2 Ge*ine dele'a"ion and *unc"ional de%ar")en"al areas+ ;e could no" deal !i"# all issues #i)sel* as

"#e business e$%anded& #e )a no" #ave been an e$%er" in all o* "#ese *ields 7 "#e business !ould

bene*i" *ro) s%ecialis" )ana'e)en"+

3 A *or) o* "rainin', i" can be )o"iva"in' "o "rainers 'ives "#e) s"a"us and res%onsibili" and "o"rainees increases "#eir /no!led'e and s/ills+ Ce'ional reci%es could beco)e a success*ul %roduc"

idea *or "#e business+ Iu" i" adds "o !or/load o* s"a** !#o are alread li/el "o be ver bus !#ic#

could #ar) "#e o%era"ional e**icienc o* "#e business+

4 Ge*ine in"ernal co))unica"ions+ **ec"ive co))unica"ions !ill be ver i)%or"an" "o "#e *ir)Bs

success "!o !a co))unica"ion !ill )o"iva"e& lead "o be""er )ana'e)en" decisions& avoid

con*usion& #el% %rovide direc"ion "o "#e business+ #is !ill no" 'uaran"ee success bu" !ill 'rea"l

increase "#e c#ances o* success in a co)%e"i"ive indus"r, subDec" "o e$"ernal *ac"ors suc# as

econo)ic c#an'es and consu)er "as"e c#an'es+


Unit 2

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Chapter #.: %easuring the effectienessof the !or*force

Case study: 'he hite Hart Hotel, page 108

1 6 )on"#s "o 0J06J06 =40

4 100 = 10:

6 )on"#s "o 1J12J06 =42

? 100 = 16+6?:

Gi**erence = 6+?:

2 e$"boo/+ ." allo!s a business "o assess "#e %roble)s o* "i)e los" "#rou'# absen"eeis)+ ."

is )os" e**ec"ive !#en bro/en do!n in"o business de%ar")en"s or sec"ions so "#a" %ar"icular %roble) areas can be iden"i*ied and ac"ion "a/en, i* necessar+

3 Lill is *air bu" *ir) and does no" believe "#a" "#ere is an sco%e *or s"a** %ar"ici%a"ion or

involve)en" in "#e business+ #is a%%roac# )i'#" be a%%ro%ria"e !i"# s#or"K"er) con"rac"

or %ar"K"i)e s"a** !#o )a #ave "oo li""le e$%erience o* "#e business "o con"ribu"e ideas+ ."

)i'#" also be a%%ro%ria"e i* 3uic/ decisions need "o be "a/en, e+'+ #o! "o cover a !or/erBs

absence+ ;o!ever, as all "#ree )easures 'iven o* e)%loee e**ec"iveness are !orsenin' 7

absen"eeis), "urnover and co)%lain"s 7 %er#a%s LillBs a%%roac# is no" bes" *or "#e

business+


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Chapter #1: 2eeloping an effectie!or*force: recruitment, selection and

training

Case study: 3eters Cathedral /a*ery, page 14

1 e$"boo/ de*ini"ion+ ;'iene o%era"ives a""endin' Iis#o% Auc/land 9olle'e on a daK

release basis+

2 Wan"s "o s"a a#ead o* "#e co)%e"i"ionB !ell "rained s"a** !ill be needed "o ensure "#is is

%ossible+

#e ne!lKbuil" s"a"eKo*K"#eKar" ba/erB "#is !ill need s"a** !#o #ave been s%eci*icall

"rained "o o%era"e "#e e3ui%)en"+3 For ensures "#a" all )ana'ers and e)%loees can *ocus on "rainin' and i)%rovin' "#eir

s/ills !i"#ou" "#e !orr o* )ee"in' !or/ "ar'e"s e"c+& )a be )ore e**ec"ive "#an s"a**

"rainin' "a/in' %lace all ear round !#ic# could involve s"a** absences a" /e "i)es o* "#e

ear "#is )i'#" be )ore disru%"ive "o %roduc"ion "#an closin' *or one !ee/+

A'ains" disru%"ive "o su%%liers and cus"o)ers )abe cus"o)ers !ill see/ o"#er su%%liers

over "#is %eriod and beco)e ver #a%% !i"# "#eir %roduc"s and %rices8& s"oc/ levels o*

%eris#able *inis#ed 'oods and )a"erial su%%lies !ill need "o be )oni"ored care*ull

s#ould s"oc/s o* *inis#ed 'oods be buil" u% "o su%%l cus"o)ers durin' "#e one !ee/

closureE

4 valua"ive 3ues"ion "#a" re3uires s"uden"s "o assess "#e di**eren" )e"#ods o* recrui")en",

selec"ion and "rainin' and e$%lain #o! "#ese can con"ribu"e "o "#e develo%)en" o* an

e**ec"ive !or/*orce& "#a" even !i"# a 'ood recrui")en", selec"ion and "rainin' ss"e), an

e**ec"ive !or/*orce also de%ends on )o"iva"ion o* s"a** a" !or/, e**ec"ive leaders#i% e"c+&

s"a** )a be %oac#ed b o"#er e)%loers i* "#e #ave been "rained "o a ver #i'# level 7

"#is could reduce "#e e**ec"iveness o* "#e !or/*orce+

AQA Business Studies AS Level © Nelson Thornes Ltd 2009

Unit 2

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Chapter ##: 2eeloping and retaining aneffectie !or*force: motiating

employees

Case study: 5oster eoman and 'rue orth, page

168

1 e$"boo/ e$%lana"ion+ .n "#e case s"ud, 3uarr )ana'ers !ere 'iven e$%anded roles "#a"

'ave "#e) e)%o!er)en" "o "a/e con"rol over )ore )ana'e)en" "as/s+ #is included

"a/in' con"rol o* %lannin' ac"ivi"ies and decision )a/in'+ #is e)%o!er)en" reduced

labour "urnover+

2 )%o!erin' s"a** a" lo!er levels o* "#e or'anisa"ional s"ruc"ure 7 develo%in' "#eir)ana'erial s/ills 7 could #el% "o reduce s"a** "urnover in a nu)ber o* !as+ )%o!ered

s"a** !ill *eel a 'rea"er sense o* i)%or"ance, s"a"us and res%onsibili"+ #is !ill encoura'e

"#e) "o a%%l *or in"ernal %ro)o"ion %os"s and reduce "#e c#ance o* "#e) leavin' "#e

business "o 'ain %ro)o"ion+ Also, o"#er !or/ers in "#e business )a consider "#a" be""er

decisions are bein' "a/en b )ana'ers closer "o "#e)B ra"#er "#an in "o% )ana'e)en"

%osi"ions+ Ie""er co))unica"ion !i"# "#ese !or/ers could reduce "#e ris/ o* "#e) leavin'

!i"#in "#e *irs" "!o ears o* e)%lo)en"+

3 $%lain di**eren" *inancial )e"#ods o* )o"iva"ion+ ac# #as advan"a'es and disadvan"a'es

!#ic# need "o be analsed in "#e con"e$" o* a 3uarr+ For e$a)%le bonuses *or *as"er

!or/ or #i'#er levels o* ou"%u" !ould %robabl increase ou"%u" and e**icienc bu" could i"

%u" #eal"# and sa*e" a" ris/ in "#is dan'erous environ)en"E Subsidies *or %riva"e )edicalinsurance %ossibl use*ul "o "#e co)%an in a business !i"# a %oor acciden" recordE

!ould be e$%ensive *or over ?00 s"a** and )ana'ers+ Iu" b "rea"in' everone e3uall i"

!ould reduce barriers be"!een )ana'ers and !or/ers !#ic# could %rove "o be

)o"iva"in'+

4 #e increased *ocus on nonK*inancial )e"#ods o* )o"iva"ion 7 %ersonal develo%)en", *or

e$a)%le 7 is li/el "o #ave a %osi"ive i)%ac" on )o"iva"ion+ #is #el%s "o sa"is*

Maslo!Bs #i'#er order needs e+'+ es"ee) and sel* *ul*il)en"+ .n "#is business i" #as

#el%ed "o reduce labour "urnover 7 "#is is a 'ood indica"ion o* i)%roved )o"iva"ion+

;o!ever, "#is a%%roac# does no" 'uaran"ee "#a" all !or/ers are )o"iva"ed+ So)e %ar"K"i)e

or "e)%orar s"a** )a onl be in"eres"ed in *inancial re!ards+ So)e s"a** )a no" see/

addi"ional res%onsibili" and involve)en" in "#e business 7 "#e )i'#" be resis"an" "o "#e

c#an'es in a""i"udes re3uired+ #e evidence in "#is case is "#a" "#e ne! a%%roac# is

!or/in' !ell bu" needs "o be )oni"ored *re3uen"l "o ensure "#a" i" is 'ivin' "#e bene*i"s

e$%ec"ed+

(ummary -uestions, page 16

1 #e !a "#e Dobs, res%onsibili"ies and %o!er !i"#in a business are or'anised+ N*"en s#o!n b

)eans o* an or'anisa"ional c#ar"+ )ar/s *or 'ood unders"andin', 172 )ar/s *or so)e

unders"andin'

2 Man levels o* #ierarc#& co))unica"ion can be slo! and inaccura"e& s%ans o* con"rol "end "o be

narro!+ 1 )ar/ eac#

3 Wi"# *e! levels o* #ierarc#, co))unica"ion be"!een "o% and bo""o) o* "#e or'anisa"ion is o*"en3uic/ and accura"e i" #as "o %ass "#rou'# *e!er levels& *e!er levels o* #ierarc# leads "o


Unit 2

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10/30

e)%loin' *e!er )iddle )ana'ers 7 saves on over#eads& s%ans o* con"rol are usuall !ider and "#is

can lead "o increased dele'a"ion+ 1 )ar/ *or eac# %oin" )en"ioned %lus 1 )ar/ *or so)e

e$%lana"ion

4 Ge*ine dele'a"ion+ 1 )ar/ Iene*i"s Frees u% senior )ana'e)en"K"i)e *or s"ra"e'ic decisions&

'ives Dunior e)%loees use*ul e$%erience& increases "#e s"a"us and co)%le$i" o* !or/ %er*or)ed b Dunior e)%loees so i)%roves )o"iva"ion+ u% "o )ar/s *or e$%lainin' an one %oin"

5 e$"boo/ )a"erial+ 1 )ar/ *or so)e unders"andin' o* role %lus 1 )ar/ *or so)e develo%)en" o*

"#is %oin" 4

6 Fac"ors re*erred "o in "#e "e$"boo/ include business 'ro!"# 7 )ore de%ar")en"s, divisions or levels

o* #ierarc# )i'#" be necessar as a business e$%ands& )ar/e" condi"ions i* "#ese are c#an'in'

ra%idl, !ould a *la""er s"ruc"ure allo! "#e business "o be )ore *le$ible and ada%"able "o c#an'eE&

cul"ure o* "#e business 7 i* en"er%rise is "o be encoura'ed in "#e business %er#a%s a *or)al and ri'id

#ierarc#ical s"ruc"ure is inadvisable+ 1 )ar/ *or )en"ion %lus 1 )ar/ *or develo%in' eac# %oin"

7 a) Ge*ine or'anisa"ional s"ruc"ure+ 1 )ar/ Gia'ra)s s#ould be re!arded 7 es%eciall i* "#e s#o!

"!o o!ners !i"# di**eren" de%ar")en"al res%onsibili"ies or s#o! "#e "!o branc#es o* "#e business

bein' o%era"ed as se%ara"e de%ar")en"s+ **ec"iveB !ould i)%l clear lines o* au"#ori" andco))unica"ion+ u% "o )ar/s *or e$%lainin' !# s"ruc"ure su''es"ed is a%%ro%ria"e

8 False 7 volun"ar labour "urnover !#ere e)%loees c#ose "o leave "o "a/e u% e)%lo)en" in

ano"#er Dob is #i'#er, es%eciall durin' %eriods o* lo! une)%lo)en" and in indus"ries suc# as

ca"erin' and leisure+ Mos" e)%loers !ill !an" "o avoid "#e cos"s o* )a/in' !or/ers redundan"

unless absolu"el necessar e+'+ durin' a recession+

a) rue 7 "#is )easure is easier "o use *or in"erna"ional co)%arisons see %a'e 145 o* "e$"boo/+

b) False 7 i* ou"%u" %er !or/er is *allin' "#en "#is )eans e**icienc is *allin' and uni" labour cos"s

!ill rise+

c) rue 7 #i'# absen"eeis) reduces !or/ersB "o"al ou"%u" so "#is !ill reduce ou"%u" %er !or/er over

a %eriod o* "i)e+

1 )ar/ *or correc" s"a"e)en" %lus 2 )ar/s *or e$%lana"ion 4

9 9an )a/e co)%arisons over "i)e and !i"# o"#er *ir)s in "#e sa)e indus"r+ (o! levels o*

!or/*orce %er*or)ance !ill reduce a *ir)Bs e**icienc+

10 e$"boo/, %a'e 150

11 Ge*ine e$"ernal recrui")en"+ 1 )ar/ ." isnB" al!as necessar !#en !or/ers !i"#in "#e business

are !illin' and able "o be considered *or "#e vacan" %os"+ 2 )ar/s

12 e$"boo/

13 i)e and *inance available& #o! i)%or"an" "#e )ana'er believes %resen"a"ions or de)ons"ra"ions o*

"#e a%%lican"sB abili" is& i)%or"ance o* c#arac"erJ%ersonali" *or "#e Dob& are s%ecialis" selec"ion

s/ills available a)on's" e$is"in' in"ernal s"a**E 1 )ar/ *or )en"ion %lus 1 )ar/ *or a%%lica"ion "o

res"auran" business14 Ge*ine recrui")en" and selec"ion+ 2 )ar/s

." is ver i)%or"an" i* s"a** #ave ina%%ro%ria"e s/ills or ou"loo/s because "#e #ave no" been

selec"ed care*ull, "#en "#is could be a )aDor cause o* #i'# labour "urnover and %oor 3uali" %lus

a%%lica"ion "o "#is business+

." is no" so i)%or"an" even !i"# s"a** !#o #ave been recrui"ed and selec"ed e**ec"ivel labour

"urnover could be #i'# o"#er local *ir)s )i'#" o**er #i'#er !a'es& 3uali" )i'#" be %oor !orn

ou" )ac#iner *or )a/in' so*" "os+ u% "o 6 )ar/s *or analsin' %oin"s *or and a'ains"

valua"ion recrui")en" and selec"ion can be vi"al "o "#e e**icienc o* a business 7 es%eciall !#ere

#i'# s/ills are needed or "#e abili" "o !or/ in "ea)s is needed+ ;o!ever i" is no" "#e onl *ac"or

in*luencin' )o"iva"ion, labour "urnover and 3uali" in "#is )anu*ac"urin' con"e$"+ 4 )ar/s *or

evalua"ion15 e$"boo/ 1 )ar/ *or )en"ion o* eac# )e"#od %lus 1 )ar/ *or so)e develo%)en"


Unit 2

Answers


11/30


12/30

Chapter #$: %a*ing operational decisions

&ctiities, page 174

9a%aci" u"ilisa"ion A 50: I 54+2: 9 @5+?: G 1+?:

Uni" cos" £

120

100

86.7

66

58.3

Case study: Can !e match (!atch+ page 178

1 ." is "#e e**icienc !i"# !#ic# resources are used "o %roduce 'oods and services 7 o*"en )easured in

"er)s o* cos" %er uni"B or uni" cos"B

2 Uni" cos" o* %roduc"ion =ou"%u"Annual

cos"sannual1o"al

=000,50

£2+@)

= £@ %er uni"

3 #e business is curren"l o%era"in' a" 55: o* ca%aci" 50,000 uni"s %er ear+ #is )eans "#a"

"o"al annual ca%aci" is 66,6 uni"s+ .* "#e business increased ou"%u" "o 0: "#en annual ou"%u" is

5?2,?26 uni"s+ Uni" cos" beco)es £2+@) P 5?2,?26 = £4+0 #ese are "ric/ *i'ures bu" s"uden"s

s#ould be able "o !or/ "#is ou" e**ec"ivel !i"# calcula"ors8

4 Quali" "#e %ercen"a'e o* ou"%u" reDec"ed as *aul"& ou"%u" %er !or/er or %er s#i*" %roduc"ivi"&

uni" cos"& ca%aci" u"ilisa"ion or o"#er relevan" o%era"ions "ar'e" !i"# brie* e$%lana"ion+

5 SubKcon"rac"in' ou"%u" "#is is c#ea%er "#an increasin' ca%aci" and )a be c#ea%er "#an #oldin'

lar'e s"oc/s o* *inis#ed !a"c#es "o sell durin' %ea/ %eriods+ Iu" can 3uali" be relied u%on

es%eciall !#en S!a"c# #as suc# a 'ood re%u"a"ion "o %ro"ec"E

;old addi"ional s"oc/s "o sell durin' %ea/ "i)es no %roble)s !i"# 3uali" o* ou"%u" *ro) subK

con"rac"ors or "e)%orar s"a** bu" consu)er "as"es )a c#an'e *or "#e desi'ns "#a" S!a"c# are

#oldin' in s"oc/, %lus "#e cos" o* ca%i"al "ied u% in s"oc/s+

Nverall )os" li/el )e"#od in "#is indus"r i* "#e lac/ o* ca%aci" is "e)%orar e+'+ seasonal

de)and s!in's is "o #old s"oc/s onl a s)all s"ora'e ca%aci" re3uired and "#e s"oc/ is no"

%eris#able+ .* "#e ca%aci" s#or"a'e is li/el "o be lon' "er) ei"#er subKcon"rac"in' or increasin'

scale o* %roduc"ion A2 conce%" are )ore li/el+


Unit 2

Answers


13/30

Chapter #0: 2eeloping effectieoperations: -uality

Case study: uality assurance in practice, page

180

1 e$"boo/

2 9us"o)er loal" !ill be lo! 7 *e! re"urn cus"o)ers !ill reduce revenue, es%eciall as "#is is li/el

"o be a co)%e"i"ive )ar/e"+

Gisa%%oin"ed cus"o)ers are li/el "o "ell *a)il and *riends 7 a bad re%u"a"ion !ill s%read 3uic/l+

3 More cus"o)er loal" and re%ea" clien"s+ (ess !ill #ave "o be s%en" on a""rac"in' ne! cus"o)ers

!#ic# !ill #el% "o reduce *i$ed cos"s

;i'#er re%u"a"ion !ill allo! "#e business "o consider raisin' i"s %rices es%eciall i* de)and s"ar"s "o

e$ceed ca%aci"+ #is s#ould increase %ro*i"abili"

More re!ardin' %lace "o !or/ 7 dealin' !i"# cus"o)er co)%lain"s "a/es "i)e and de)o"iva"es

!or/ers+ ." beco)es easier "o recrui" and re"ain s"a**+

4 #e )ana'er se" clear 3uali" assurance s"andards !#ic# %rovided *ocus *or all o* "#e e)%loees+

#ese !ere )easurable and eas "o revie!+ .deall "#e s#ould #ave been discussed and a'reed

!i"# !or/ers e" "#ere is no evidence o* "#is #avin' occurred+ Suc# a'ree)en" )i'#" #ave added "o

"#e )o"iva"ion levels o* "#e s"a** and 3uali" i)%rove)en"s could #ave been )ade even )ore

3uic/l+

9os"s rose ini"iall 7 )ee"in' c#allen'in' s"andards can lead "o increased s"a**in' needs bu" "#is

!ould also #el% "o increase cus"o)er sa"is*ac"ion+#e )ana'er see)s "o #ave been Dus"i*ied in se""in' "#ese s"andards and in"roducin' "#is 3uali"

ss"e) 7 bu" did s#e !in "#e s"a** over *irs" and convince "#e) o* "#e need *or c#an'eE


Unit 2

Answers


14/30

Chapter #4: 2eeloping effectieoperations: customer serice

Case study: 3ret a %anger ) a cut aboe the rest+

page 1#

1 e$"boo/ de*ini"ion

2 S%eed o* service& *res#ness o* *ood& ran'e o* *ood and drin/ available& %oli"eness and %ersonali" o*

s"a**+ $%lain all in con"e$"+

3 Ce%ea" cus"o) "#rou'# #i'# levels o* cus"o)er loal" 7 develo%in' rela"ions#i%s !i"# e$is"in'

cus"o)ers !ill al!as be c#ea%er "#an s%endin' on %ro)o"ion "o a""rac" ne! cus"o)ers+

WordKo*K)ou"# %ro)o"ion *ro) e$is"in' cus"o)ers "o o"#ers 7 a'ain, "#is *or) o* %ro)o"ion !ill bec#ea%er "#an %aid *or adver"isin'+

Iusiness )a be able "o c#ar'e #i'#er %rices "o re*lec" "#e #i'# 3uali" o* cus"o)er service+

4 9o)%an )ana'ers can se" s"andards *or cus"o)er service e+'+ s%eed o* service, ran'e o* 'oods on

o**er, bu" "#e ac"ual deliver o* 3uali" service de%ends 'rea"l on "#e individuals !#o #ave con"ac"

!i"# "#e cus"o)er+ #is con"ac" can be in an *or) e+'+ *ace "o *ace or "ele%#one+ ;o!ever, !i"#ou"

co)%an )ana'ers se""in' s"andards *or cus"o)er service and ensurin' "#a" s"a** are !ell )o"iva"ed

and !an" "o o**er 3uali" service, even /een and *riendl individual !or/ers )a no" o**er "#e

cus"o)ers !#a" "#e e$%ec" durin' "#e %urc#asin' %rocess+

(ummary -uestions, page 1$1 e$"boo/

2 e$"boo/

3 ;el%s reduce !as"e and cos"s& #el%s "o *ocus "#e de%ar")en" on obDec"ives& #el%s "o reac# "#e

o%era"ional e**icienc o* "#e bes" in "#e indus"r+ 2 )ar/s *or reasons %lus 1 )ar/ *or e$%lainin'

one %oin"

4 #is could resul" in a !as"e o* resources+ 9us"o)er arrival and 3ueuin' "i)es could be )oni"ored

and a" less bus "i)es o* da, *e!er cas#iers could be used 7 s"a** could be %er*or)in' o"#er "as/s+

1 )ar/ *or %oin" %lus )ar/s *or e$%lana"ion

5 o"al cos"s divided b ou"%u" in a cer"ain "i)e %eriod+ 2 )ar/s

6

Ca"e o* ca%aci"

u"ilisa"ion :

Uni" cos" a" curren"

ou"%u" £

Uni" cos" a" )a$i)u)

ca%aci" £

Fir) A 50 10 7.50

Fir) I @+ 0 26.67

#ir$ 89.8 5 4.80

7 !o %roble)s could include s#ould %roduc"ion be consis"en" "#rou'#ou" "#e ear and s"oc/s

#eld or s#ould %roduc"ion var "o )ee" de)and %a""erns& 'iven "#e na"ure o* "#e %roduc",

variable %roduc"ion is li/el so e$cess ca%aci" )i'#" e$is" ou" o* season 7 a !as"e o* resources&

*ull ca%aci" !or/in' )i'#" be a %roble) durin' "#e %ea/ season, crea"in' o"#er %roble)s+ 2

)ar/s *or %roble)s %lus 1 )ar/ eac# *or e$%lana"ion


Unit 2

Answers


15/30

a) Fres#ness and 3uali" !ill su**er i* s"oc/s are #eld *or lon' %eriods+ #is !ould be a %ar"icular

%roble) *or "#is business as i" s%ecialises in e$%ensive *ood #a)%ers as cus"o)er e$%ec"a"ions

are li/el "o be ver #i'# "oo+ Failure "o )a"c# ou"%u" "o orders could )ean "urnin' cus"o)ers

a!a 7 "#ere !ill be co)%e"i"ors in "#e indus"r !#o )a be able "o su%%l )ore %ro)%"l+ 2

)ar/s *or %oin"s& 2 )ar/s *or a%%lica"ion "o business& 2 )ar/s *or e$%lana"ion or analsis

b) Fle$ible labour con"rac"s 7 %ar"K"i)e or "e)%orar s"a**+ Ver co))on in ca"erin' indus"r bu"

!ill "#e need "rainin'E Will "#e be able "o )ain"ain #i'# 3uali" s"andardsE Will "#e be !ell

)o"iva"ed !i"# lac/ o* Dob securi"E

Nu"sourcin' 7 usin' o"#er ca"erin' co)%anies "o su%%l so)e o* "#e con"en"s o* "#e #a)%ers+

Will "#e )ee" Food Girec"Bs 3uali" s"andardsE 9ould cus"o)er sa"is*ac"ion be reducedE Will

subKcon"rac"ed businesses c#ar'e )ore *or "#e %roduc"s "#e %roduce "#an Food Girec" could

%roduced "#e) *orE 1 )ar/ *or eac# %oin", 2 )ar/s *or a%%lica"ion, 2 )ar/s *or analsis o* #o!

)e"#od su''es"ed !ill solve "#e %roble), 2 )ar/s *or evalua"ion

8 False 7 3uali" is no" an absolu"e conce%" #i'#er %riced 'oods o*"en lead "o cus"o)ers #avin'

#i'#er e$%ec"a"ions+

a) False 7 i" can do, i* addi"ional s"a** "rainin' or e$"ra s"a** are needed+ Iu" b reducin' *aul"'oods and re"urned 'oods *ro) cus"o)ers, cos"s could *all+

b) False 7 i" cer"i*ies "#a" 3uali" assurance s"andards or %rocesses are in %lace bu" i" does no"

'uaran"ee "#a" "#e are /e%" "o+

c) rue 7 b reducin' !as"e and "#e cos" o* *aul" 'oods bein' re"urned+ Also b increasin'

cus"o)er loal" and cu""in' do!n on "#e %ro)o"ion needed "o a""rac" ne! cus"o)ers+

9 e$"boo/

10 Quali" con"rol 7 ins%ec"in' *or 3uali" e+'+ b e)%loin' ins%ec"ors "o c#ec/ on "#e 3uali" o*

*inis#ed clo"#in' 'ar)en"s+ S"a** do no" "a/e res%onsibili" *or 3uali" and e)%loin' ins%ec"ion

s"a** can be e$%ensive+

Quali" assurance 7 se""in' a'reed 3uali" s"andards a" all s"a'es o* "#e clo"#es )a/in' %rocess+ #is

could be co)bined !i"# QM so "#a" all !or/ers /no! "#e s"andards "#e s#ould )ee" a" "#eir s"a'eo* "#e %roduc"ion %rocess and "#e acce%" accoun"abili" *or i"+

1 )ar/ eac# *or de*ini"ion, 2 )ar/s *or a%%lica"ion, 2 )ar/s *or e$%lainin' di**erence

11 Cela"ive, see "e$"boo/

12 e$"boo/

13 Surve o* cus"o)er service 7 3ues"ionnaire "o be re"urned "o 'ara'e& online *eedbac/ 7 even s)all

'ara'es )i'#" #ave a si)%le !ebsi"e& *aceK"oK*ace con"ac" !i"# cus"o)ers+

14 Gevelo%in' cus"o)er rela"ions#i%s cus"o)er rela"ions#i% )ar/e"in' "ends "o be c#ea%er "#an

a""rac"in' ne! cus"o)ers+ Mee"in' e$is"in' cus"o)ersB e$%ec"a"ions !i"# "#e 3uali" o* *ood and

service !ill lead "o 'ood cus"o)er loal", %osi"ive *eedbac/ and 'ood !ordKo*K)ou"# re*erences+

#e al"erna"ive )i'#" be "o o**er discoun" vouc#ers and %a *or e$%ensive adver"isin' "o a""rac" ne!cus"o)ers+ 1 )ar/ *or con"en", 1 *or a%%lica"ion, 2 *or e$%lana"ion or analsis

15 e$"boo/, see case s"ud %a'e 11+

16 Mar/e" researc# !ill indica"e "#e )ar/e" se')en" "#a" "#e ca*R s#ould ai) a" and "#e %rice levels

"#a" are li/el "o be )os" a%%ro%ria"e+ #e se')en" iden"i*ied !ill %ar"l iden"i* "#e cus"o)er

e$%ec"a"ions !#ic# !ill assis" "#e business in se""in' cus"o)er service levels+

17 See earlier 3ues"ions and "e$"boo/+

18 Nnline 3ues"ionnaire& direc" in"ervie!s as cus"o)er re"urns car+ 1 )ar/ *or eac# )e"#od %lus 1

)ar/ *or eac# e$%lana"ion or a%%lica"ion

a) Se" 3uali" s"andards "#a" are e3ual "o "#e bes" in "#e indus"r benc#)ar/in'E in "er)s o* s%eed

o* service, 3uali" o* cus"o)er con"ac" service, cleanliness o* cars e"c& "rain s"a** and )o"iva"e

"#e) "o reac# "#ese s"andards consis"en"l+ 1 )ar/ eac# *or u% "o 2 %oin"s, 2 )ar/s *or eac# %oin" e$%lained


Unit 2

Answers


16/30

b) A balance o* ar'u)en"s is needed+ ." )a no" be %ossible "o /ee% lo! %rices and o**er e$cellen"

cus"o)er service e+'+ cleanliness o* cars, a'e o* cars or s%eed o* service+ ;o! %rice elas"ic is "#e

de)and *or car #ireE .s "#ere a )ar/e" *or lo!er %rices bu" older carsE

." )i'#" be c#ea%er *or "#e business "o con"inue "o o**er older cars and less e**icien" cus"o)er

service 7 in "#e s#or" "er)+ #is )i'#" be %ro*i"able in a recession+.* "#e cos"s o* %ro)o"ion and adver"isin' are #i'# i" )i'#" be c#ea%er in "#e lon' run "o ado%" a

di**eren" s"ra"e' #o! co)%e"i"ive is "#e )ar/e" do)ina"ed b "#e !ell /no!n car #ire

co)%aniesE

2 )ar/s *or %oin" )ade, 2 )ar/s *or a%%lica"ion, )ar/s *or analsis or e$%lana"ion, )ar/s

*or evalua"ion and *inal Dud'e)en"


Unit 2

Answers


17/30

Chapter #6: or*ing !ith suppliers

Case study: 'reat your suppliers li*e *ings, page

1

1 A rela"ions#i% "#a" leads "o %ro)%" and reliable deliver o* 3uali" 'oods and services "o "#e

business cus"o)erBs e$%ec"a"ions a" an acce%"able cos"+

2 Iein' o**ered lar'e a)oun" o* credi" *reed u% !or/in' ca%i"al, !#ic# !as s%en" on )ar/e"in'+ #is

!ould #ave #el%ed "o reduce *inancin' cos"s as "#e al"erna"ive )i'#" #ave been an e$%ensive

overdra*"+ Quic/ res%onse "o a rus#ed order allo!ed Mul"i%li9G "o o**er 'ood service "o i"s o!n

cus"o)ers+ #is !ould en#ance Muil"i%li9GBs o!n re%u"a"ion+

3 (o! cos" 7 *as" *ood is a ver co)%e"i"ive )ar/e"& 'ood 3uali" 7 consu)ersB e$%ec"a"ions *or

3uali" and *res# *ood )us" be )e"& #el% !i"# selec"in' in'redien"s and )enu i"e)s "o o**er value

*or )one& reliabili" o* deliver 7 res"auran" !an"s "o avoid "oo )an "#a" i"e) is no lon'er

availableB si"ua"ions& an o"#er relevan" *ac"or+

4 Success o* ei"#er business !ill be #eavil de%enden" on reliable and cos"Ke**ec"ive su%%lies o*

acce%"able 3uali" in'redien"s+ Lood su%%lier rela"ions#i%s !ill #el% "o i)%rove "#e 3uali" o* "#e

*inis#ed %roduc", "#e con"inui" o* %roduc"ion and *inal consu)er sa"is*ac"ion+ $a)%les can be

analsed *ro) ei"#er indus"r+ ;o!ever "#ese su%%lier rela"ions#i%s, al"#ou'# i)%or"an", canno"

'uaran"ee success as )an o"#er *ac"ors !ill de"er)ine "#is "oo e+'+ )o"iva"ed s"a**, 3uali"

assurance s"andards, desi'n o* "#e %roduc" e"c++


Unit 2

Answers


18/30

Chapter #7: Using technology inoperations

Case study: %ore chips at the supermar*et+ page

#.6

1 e$"boo/

2 An "!o selec"ed and e$%lained+ For e$a)%le c#i% and %in 7 convenience "o cus"o)er and sa*er

"#an cas#& in"erne" s#o%%in' 7 saves "i)e and )ore convenien", saves cus"o)ers a Dourne+

3 Ceducin' "#e nu)ber o* c#ec/Kou" s"a** as "#e elec"ronic CF.G "a's record %roduc" and %rice as

cus"o)ers %ass "#e c#ec/Kou" %oin"+ Ceduces cos" o* recrui"in', "rainin' and %ain' s"a**+

raceabili", !#ic# is ver i)%or"an" !#ere consu)er sa*e" is concerned e+'+ !i"# *aul" elec"ronic

%roduc"s and also !i"# or'anic %roduc"s e+'+ "#eir ori'in and source can be "raced bac/ "o ori'inal'ro!er+

4 Iuin' ne! "ec#nolo' is onl #al* o* "#e . s"ra"e' di**eren" ss"e)s need "o be analsed and

!ei'#ed u% !i"# "#e cos"s co)%ared "o %o"en"ial cos" savin's+ N"#er issues need "o be addressed

"oo+ Giscussin' !i"# s"a** e+'+ "#rou'# !or/ councils or "rade unions abou" "#e i)%ac" on "#e),

"#e need *or "rainin' and ne! s/ills and e$%lainin' "#e %ossible redundanc i)%lica"ions+ #e

in"roduc"ion o* "#e ss"e) needs "o be %lanned *or s%ecialis" s"a**in' needs and "rial runs "o ensure

co)%a"ibili" !i"# e$is"in' ss"e)s+ Finall, "#e decision needs "o be revie!ed a'ains" "#e

obDec"ives *or i"+

(ummary -uestions, page #.7

1 9o)%u"er su%%liers, *urni"ure su%%liers, co**ee and o"#er drin/ or *ood su%%liers+

2 S"uden"sB o!n ans!er based on "#e su%%lier c#osen e+'+ value *or )one, reliabili", 3uali" e"c+ 1

)ar/ *or *ac"or %lus 1 )ar/ eac# *or a%%lica"ion

3 rade s#o!s, business direc"ories or in"erne" 1 )ar/ eac#, )a$i)u) 2 )ar/s

4 S"uden"sB o!n e$a)%le, e+'+ A *urni"ure re"ailer in bus #i'# s"ree" loca"ion %rice i)%or"an" as i"

)a be a loca"ion !i"# o"#er *urni"ure su%%liers& lon' credi"orsB %eriod as "#e s#o% )a #ave "o

o**er i"s cus"o)ers credi" "oo& "#e lon'er "#e re"ailer #as be*ore i" %as bac/ deb" "#e be""er !ill be

i"s !or/in' ca%i"al %osi"ion+ 2 )ar/s *or %oin"s, 2 )ar/s *or a%%lica"ion, 2 )ar/s *or analsis

5 Fas" e$%andin' )eans "#e )anu*ac"urer !an"s "o be assured "#a" "#e su%%lier can co%e !i"# de)and

increases, "o avoid #old u%s in %roduc"ion and *ailure "o sa"is* cus"o)ers+

#e )anu*ac"urer )a no" be able "o *ind ano"#er su%%lier o* si)ilar co)%onen"s a" s#or" no"ice

needs "o %lan *or "#is even"uali" b *indin' ou" i* "#e e$is"in' su%%lier can co%e !i"# increased

de)and+ 1 )ar/ *or eac# %oin" 7 )a$i)u) o* 2, u% "o 2 )ar/s *or e$%lana"ion

6 e$"boo/

a) ;el% "o o**er 'ood service "o su%er)ar/e"s cus"o)ers& su%%lier )a advise on bes" 3uali"

%roduc"s or bes" %rices a" di**eren" "i)es o* ear+ 1 )ar/ *or %oin", 1 )ar/ *or a%%lin' eac#

%oin" %lus 2 )ar/s *or e$%lainin' eac# %oin"

b) >eeds *res# and #i'# 3uali" %roduce& credi" "er)s "o #el% %reven" cas# *lo! %roble)s&

reliabili" "o o**er con"inuous selec"ion o* 'oods "o cus"o)ers& value *or )one even in a re'ion

o* rela"ivel #i'# inco)es+ 1 )ar/ eac# *or *ac"or, 1 )ar/ eac# *or a%%lica"ion, 2 )ar/s *or eac#

%oin" !ell analsed

c) Su%%lier rela"ions#i%s !ill be %ar"icularl i)%or"an" in "#is #i'#l co)%e"i"ive indus"r+

Su%%liers !ill need "o o**er value *or )one i+e+ lo! %rices !#ile )ain"ainin' "#e su%er)ar/e"Bs


Unit 2

Answers


19/30

3uali" s"andards as !ell as reliabili" o* su%%l, credi" "er)s su%er)ar/e"s are o*"en bad

%aers as !ell as con"ribu"in' %roduc" develo%)en" ideas "o "#e su%er)ar/e"+ Lood su%%lier

rela"ions#i%s could #el% "o es"ablis# an e$cellen" i)a'e *or "#e su%er)ar/e" 7 e+'+ 'enuine

or'anic %roduc"s a" a reasonable %rice+ Iu" success de%ends on )ore "#an su%%liers and 'ood

rela"ions#i%s )a be a necessar bu" no" su**icien" condi"ion *or success+ N"#er *ac"ors include

loca"ion, s"a**in' and "rainin' and s"ore laou" e"c+ u% "o )ar/s *or %oin"s or /no!led'e, 2

)ar/s *or a%%lica"ion, )ar/s analsis o* %oin"s and 2 )ar/s *or evalua"ion

7 e$"boo/

8 e$"boo/ e+'+ case s"ud on %a'e 205

9 e$"boo/ 1 )ar/ *or eac# de*ini"ion %lus 1 )ar/ *or di**eren"ia"ion e+'+ b e$a)%le o* a%%lica"ion

o* eac# "ec#nolo'

10 Man ans!ers %ossible+ For e$a)%le, a /i"c#enKdesi'n business able "o dis%la several laou"s "o

clien"s& able "o )a/e 3uic/ c#an'es "o desi'ns& vir"ual "our around /i"c#en %ossible& 3uic/er "o

desi'n and )ore a%%ealin' "o clien"+ 1 )ar/ *or e$a)%le, 2 )ar/s *or a%%lica"ion and 1 )ar/ *or

analsis

11 Cobo"s are "#e "%ical e$a)%le ca%i"al in"ensive %roduc"ion raises %roduc"ivi" and reduces uni"cos"s 7 i)%or"an" in co)%e"i"ive )ar/e"s !i"# e$cess ca%aci"& *le$ibili" o* %roduc" desi'n "#a" can

be buil" on one %roduc"ion line 7 allo!s c#an'es in consu)er de)and "rends "o be 3uic/l

conver"ed in"o %roduc"ion c#an'es+ 2 )ar/s *or bene*i"s, 2 )ar/s *or a%%lica"ion, 2 )ar/s *or

e$%lana"ion or analsis

12 Ma use labour in"ensive )e"#ods "o allo! *or individual #andKcra*"ed c#ocola"e %roduc"s "o be

)ade& o**ers a uni3ue sellin' %oin" co)%ared "o )ass %roduced con*ec"ioner& )a no" #ave "#e

*inance "o bu advanced "ec#nolo' 7 s%ecialis" c#ocola"e )a/er i)%lies )a be a s)all business+

2 )ar/s *or %oin"s, 2 )ar/s *or a%%lica"ion, 2 )ar/s *or analsis

13 Ge*ine %roduc"ivi"+ $%lain #o! . based %roduc"ion )e"#ods are li/el "o increase ou"%u" %er

!or/er 7 e+'+ co)%u"er con"rolled cleanin' )ac#ines )a be 3uic/er and #ave )an )ore

%ro'ra))es !#ic# can be *le$ibl selec"ed *or di**eren" )a"erials+ 1 )ar/ %oin" )ade, 1 )ar/a%%lica"ion, 2 )ar/s analsis

14 e$"boo/

a) 9AG 7 desi'n ne! *abrics and s#o! e**ec" in onKscreen i)a'esB o* cur"ains or u%#ols"er&

9AM 7 "urn ne! desi'ns in"o *inis#ed %roduc"s 3uic/l and accura"el+ 2 )ar/s *or uses, 2

)ar/s *or a%%lica"ion, 2 )ar/s *or analsis o* %oin"s

b) rainin' o* s"a** 7 are "#e "radi"ional cra*" !or/ers& %o"en"ial redundancies i* "#e desi'n and

%roduc"ion %rocess is ver e**icien"& *inance 7 #o! !ill "#e ca%i"al be raised i* sales, and

%ossibl %ro*i"s, are *allin'E 2 )ar/s *or u% "o 2 %oin"s, 2 )ar/s a%%lica"ion, 2 )ar/s *or

analsis

c) Fur"#er . !ill reduce uni" cos"s i* ou"%u" rises )ore "#an cos"s+ #is could be i)%or"an" !i"#

*orei'n co)%e"i"ion "a/in' a bi''er )ar/e" s#are+ N**erin' cus"o)ers a 3uic/er service !i"# %ossibl a !ider ran'e o* desi'ns or *abrics could beco)e an i)%or"an" di**eren"ia"in' *ac"or+

Iu" !ill "#e #andK)ade i)a'e o* "#e %roduc" da)a'e re%u"a"ion and salesE Will Dob losses be

%erceived as bein' sociall irres%onsibleE

Nverall Dud'e)en" re3uired+ )ar/s *or %oin"s, 2 )ar/s *or a%%lica"ion, )ar/s *or analsis and 2

)ar/s *or evalua"ion


Unit 2

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20/30

Chapter #8: 9ffectie mar*eting

Case study, page #10

1 e$"boo/ and a%%lica"ion *ro) case

2 ." is a business o%era"in' in a consu)er )ar/e", o**erin' services "o )ale cus"o)ers !#o !an"

%ar"icular, !ell de*ined and !ell researc#ed *ea"ures *ro) "#eir #airdressers+

3 I *ocusin' on a s)all se')en" o* "#e lar'e )ale #airdressin' )ar/e" i" see)s "o be *ul*illin' a

need *or a cer"ain "%e o* consu)er+ ." see)s "o #ave been !ell received and "#e %ublici" *ro) "#e

Iri"is# ;airdressin' A!ards !ill #el% "o )a/e "#e na)e )ore !idel /no!n "o "#is )ar/e"

se')en"+ ." is %ossible "#a" b researc#in' "#e needs o* "#e se')en" and *ul*illin' "#ese, "#e business

is able "o c#ar'e #i'#er %rices "#an a "radi"ional barber s#o%+

4 ." see)s "o #ave been ver i)%or"an" as "#e )ar/e"in' s"ar"ed !i"# )ar/e" researc#, *ollo!ed

"#rou'# in"o "#e %roduc" and service o**ered, !as su%%or"ed b a%%ro%ria"e %ricin' ver lo! %rices!ould %robabl #ave been a )is"a/e and "#e brand i)a'e !as %ro)o"ed e**ec"ivel via "#e

!ebsi"e+ #ere*ore "#e evidence su''es"s "#is "o be a ver co)%le"e and !ell in"e'ra"ed )ar/e"in'

)i$+ Iusiness success !ill al!as de%end on a ran'e o* *ac"ors, "#ou'#+ #e s"a** selec"ion and

"rainin' !ere %robabl crucial *ac"ors "oo+ S"uden"s )a su''es" and e$%lain o"#er *ac"ors+


Unit 2

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Chapter #: 2esigning an effectiemar*eting mi

Case study: &lara, page ##.

1 Ge*ine )ar/e"in' )i$+ es"lR %rice reduc"ions "o *ri'#"en o** co)%e"i"ion )i'#" #ave onl ver li)i"ed success in "er) o*

reducin' AlaraBs sales i* "#ere is s"ron' brand loal" in "#e di**eren" nic#es i" sells "oo+

>es"lR %roduc"s are *ocused )ainl on )ass )ar/e"s !ill suc# a lar'e business be in"eres"ed in

rela"ivel lo! volu)e %roduc"s and nic#e )ar/e"sE AlaraBs brand loal" and dis"inc"ive %roduc"s

)a )ean "#a" >es"lRBs %roduc" develo%)en" does no" a**ec" "#e) "oo )uc#+

3 Advan"a'es uni3ue sellin' %oin" o* develo%in' s%eci*ic reci%es *or s)all nic#e )ar/e"s+ #is see)s

"o be "#e )aDor sellin' %oin" and s#ould allo! rela"ivel #i'# %rices "o be c#ar'ed+ (o! %rice

elas"ici" is li/el+ S%endin' )one on *ur"#er %roduc" reci%es and %ublic rela"ions is %robabl

)uc# )ore e**ec"ive "#an "rin' "o adver"ise or %ro)o"e usin' )ass )ar/e"in' )e"#ods+

Gisadvan"a'es i* %rices se" are 3ui"e #i'# due "o "#e %roduc"sB uni3ue sellin' %oin"s "#en "#is could

encoura'e o"#er *ir)s "o en"er "#e )ar/e" and co)%e"e !i"# Alara+ #ere is a dan'er o* co)%le"e

loss o* consu)er con*idence i* "#ere are 3uali" or #eal"# and sa*e" %roble)s !i"# "#e %roduc"

because "#e %roduc" is !#a" "#e co)%an bases i"s )ar/e"in' )i$ around+

4 Sell "#rou'# )ore UH su%er)ar/e"s 7 )ar/e" %ene"ra"ion+ Usin' "#is c#annel )eans "#e business

!ill *ace considerable co)%e"i"ion *or s#el* s%ace and consu)er a""en"ion+ Will Alara #ave "o o**er

su%er)ar/e"s ver lo! %ricesE "#ere is ver uneven )ar/e" %o!er #ere+ Will "rin' "o sell "o a

!ider )ass )ar/e" )ean "#e %roduc" loses so)e e$clusivi" and a%%eal !i"# e$is"in' consu)ersE

#ere !ould be o%%or"uni"ies *or )uc# !ider )ar/e" covera'e, %o"en"ial *or ra%id sales 'ro!"# and

#i'#er )ar/e" s#are+ #e %roduc" or brand na)e !ill receive )uc# !ider covera'e+

Sell overseas 7 )ar/e" develo%)en"+ N**erin' "#e %roduc" "o nic#e )ar/e"s in o"#er coun"ries !ill

)ain"ain brand i)a'e+ Would "#is be done "#rou'# "#e in"erne" or "#rou'# re"ailers in "#ese

coun"riesE ;o! eas !ill i" be "o "rans%or" "#e %roduc" in"erna"ionallE Will addi"ional )ar/e"

researc# #ave "o be conduc"edE Will a %anKuro%ean or %anK'lobal s"ra"e' be e**ec"ive or !ill

Alara #ave "o ada%" "#e %roduc", %rices and %ro)o"ion "o na"ional cul"ural and consu)er "as"esE

Muc# de%ends on "#e obDec"ives o* "#e business o!ners and "#e *inance available+

A *inal reco))enda"ion is needed+


Unit 2

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22/30

Chapter $.: Using the mar*eting mi:product

Case study: ;


23/30

)ar/e"in'+ 27 )ar/s *or advan"a'es, 27 )ar/s *or disadvan"a'es 7 )a$i)u) o* 5, 2 )ar/s

*or a%%lica"ion

b) Ge*ine )ar/e" researc#+ 1 )ar/ $%lain "#e bene*i"s )ore li/el "o sell %roduc"s "#a"

consu)ers !an" and a" %rices "#e are %re%ared "o %a& )ore clearl *ocused %ro)o"ion& less

c#ance o* business *ailin'+ Iu" can be e$%ensive in "#is case, in"erne" )ar/e" researc# !ould#ave /e%" cos"s "o a )ini)u)+ Mar/e" researc# !ould be ver i)%or"an" bu" success*ul

)ar/e"in' !ould also de%end on is "#e in"erne" "#e bes" dis"ribu"ion c#annel "o useE !ill

co)%e"i"ors 3uic/l en"er "#is )ar/e" i* Ferre"s UH is seen "o be success*ulE Mar/e" researc# is

si'ni*ican", es%eciall "o a ne! business, bu" i" canno" 'uaran"ee success+

5 e$"boo/+ #is 3ues"ion could also be se" "o s"uden"s !i"#in a business con"e$" e+'+ esco or A%%le+

6 An in"e'ra"ed )i$ 'ives a clear and co#eren" )essa'e "o consu)ers+ All *our ele)en"s blend

"o'e"#er "o su%%or" "#e overall i)a'e o* "#e %roduc"+ For e$a)%le, se""in' a lo! %rice *or #and)ade

biscui"s "o be sold "#rou'# For"nu) and Masons s"ore in (ondon !ould cause con*usion in "#e )ind

o* consu)ers are "#ese #i'# or lo! 3uali" %roduc"sE Si)ilarl, cu""in' ed'e "ec#nolo' %roduc"s

need "o be su%%or"ed b e$clusive %ricin' and e$ci"in' bu" in*or)a"ive %ro)o"ional ca)%ai'ns+

7 e$"boo/ a) 9onsu)er e$%ec"a"ions )i'#" c#an'e over "i)e, e+'+ lo! %rices )i'#" be )ore i)%or"an" durin'

a recession "#an #avin' a ne! li)ousine as a "a$i cab+ Hee%in' in "ouc# !i"# consu)er

e$%ec"a"ions s#ould allo! "#e *ir) "o ada%" "o )ar/e" de)and "rends+ 2 )ar/s *or *ac"ors %lus 2

)ar/s *or e$%lana"ion or a%%lica"ion

b) Ge*ine )ar/e"in' )i$+ 1 )ar/


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Analsis o* ac"ion "#a" could be "a/en based on "#e do'BJ"#e %roble) c#ildB iden"i*ica"ion e"c+

2 )ar/s *or a%%lica"ion %lus 5 )ar/s *or analsis

14 e$"boo/

15 Ge*ine, dra! or ou"line %roduc" li*e ccle+ 2 )ar/s A%%l "o %roduc"s, *or e$a)%le, #ave i)i"a"ion

*lo!ers #ad "#eir da and are sales *or or'anic *oods s"ill 'ro!in'E Usin'


25/30

Chapter $1: Using the mar*eting mi:promotion

Case study: Irish 'ourism gets >0.m promotional

boost, page #$8

1 e$"boo/

2 Adver"isin' #as alread been !idel used+ !o o"#er ac"ivi"ies could be direc" )ailin' "o #o)es 7

%er#a%s selec"ed *ro) a da"a base o* %eo%le !#o #ave recen"l boo/ed #olidas& %ublic rela"ions

e+'+ "ouris" board could s%onsor concer"s "#a" receive !ides%read )edia covera'e& an o"#er

reasonable ans!er

3 Advan"a'es "#e *il) co)%an )i'#" be %re%ared "o con"ribu"e or allo! *ree adver"isin' on i"s o!n

%os"ers e"c+ because "#e *il) is %o"en"iall bene*i"in' "oo& "#e "ouris) based i)a'es and coloursused could be ver e**ec"ive in a cine)a environ)en"& i* "#e *il) is success*ul "#ere could be a #u'e

%o"en"ial nu)ber o* consu)ers !#o !ill see "#e cine)a adver"ise)en"s+ Gisadvan"a'es i" )i'#"

onl be seen b a s)all se')en" o* "#e "o"al %o"en"ial "ouris" )ar/e" e+'+ a c#ildrenBs *il) )i'#" no"

be seen b )an adul"s& i* "#e *il) *lo%s or is badl revie!ed "#a" could re*lec" badl on "#e

%roduc" bein' %ro)o"ed !i"# i"+

4 >o" "#e ca)%ai'n ou"lined in "#e case s"ud+ #is ca)%ai'n see)s "o be *ocused )ainl on n'lis#

s%ea/in' or UH based audiences 7 unless "#e *il) and "#e "ouris" adver"s are "ransla"ed in"o

9an"onese "oo8 N"#er ca)%ai'ns )i'#" be needed e+'+ *ocused on 9#inese V vie!ers, usin' "ravel

)a'aOines or !ebsi"es "#a" are available in 9#ina+

5 r "o see #e A%%ren"ice %ro'ra))e broadcas" on 14J5J0 on II9 7 "#e con"es"an"s #ad "o "r "o

re%ac/a'e and %ro)o"e "#e "o!n o* Mar'a"e8


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26/30

Chapter $#: Using the mar*eting mi )pricing

Case study: 392 of 3i??a, page #06

1 Sales revenue be*ore %rice reduc"ion = £10 50 = £500

a) Sales revenue a*"er %rice reduc"ion = £@ 65 = £520

2 As revenue increased a*"er %rice reduc"ion "#is )eans "#a" de)and !as %rice elas"ic+


27/30

Chapter $$: Using the mar*eting mi:place

Case study, page #4$

1 e$"boo/

2 Suc# an e$#ibi"ion is ver clearl *ocused on a "ar'e" )ar/e" so )os" visi"ors !ill be %o"en"ial

cus"o)ers+ Man !eddin' i"e)s !ill no" be %urc#ased unless "#e can be seen, co)%ared, "ried on

e"c+ and an e$#ibi"ion 'ives "#is o%%or"uni"+ ." is ver i)%or"an" "o build rela"ions#i%s e+'+ !i"#

!eddin' dress desi'ners !#o can res%ond "o a %ar"icular cus"o)erBs re3ues"s+ #is 'ives s)all

businesses in "#e !eddin' )ar/e" "#e sa)e o%%or"uni"ies as lar'e ones "o access %o"en"ial

cus"o)ers+

3 Advan"a'es as above bu" a%%lied "o s"a"ionar 7 #o! i)%or"an" is i" *or cus"o)ers "o see e$a)%leso* "#is be*ore buin'E Gisadvan"a'es a s"all a" a !eddin' e$#ibi"ion could be ver e$%ensive& *or

"#is "%e o* %roduc" "#ere )i'#" be o"#er, c#ea%er and )ore e**ec"ive !as e+'+ !ebsi"e dis%la o*

s"les !i"# an o%%or"uni" "o %rin" o** e$e)%lar cards e"c+& s"a**in' "#e s"all a" !eddin' e$#ibi"ions

)i'#" be e$%ensive and "oo cos"l *or a ver s)all business+

4 #is re3uires an assess)en" o* "#e )ar/e"s and %roduc"s "#a" )os" e**ec"ivel lend "#e)selves "o

direc" )ar/e"in' and "#ose "#a" do no"+ 9onsider "#e bene*i"s o* online sellin' and co)%are "#ese "o

"#e bene*i"s o* o"#er c#annels+ For e$a)%le s"oc/#oldin' can be under"a/en b re"ailers and

!are#ouse o%era"ions& deliver can beco)e "#e res%onsibili" o* "#e re"ailer e"c+ Ans!ers need "o

con"ain several e$a)%les 7 service indus"ries in %ar"icular !ill *ind i" ver di**icul" "o sell via

re"ailers as direc" con"ac" !i"# cus"o)er is usuall needed+ Iu", *or e$a)%le, %ain" )anu*ac"urers do

no" !an" "o be bo"#ered !i"# sellin' #al*K li"re cans o* s/ blue e)ulsion in Ilac/%ool !#ile a local

re"ailer !ould8


Unit 2

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28/30

Chapter $0: %ar*eting andcompetitieness

Case study: 3etrol retailing, page #6.

1 Fe!er nu)bers o* %e"rol s"a"ions #as 'iven "#ose "#a" re)ain )ore )ar/e" %o!er+ #is #as )ade "#e

re"ailin' o* %e"rol less co)%e"i"ive+ #ere )a no! be )an "o!ns and villa'es !i"# onl one

s"a"ion 7 'ivin' local )ono%ol %o!er+ ;o!ever, "#e )ar/e" %o!er and in*luence o* su%er)ar/e"s

#as increased and "#e co)%e"e *or )ar/e" s#are !i"# %rice reduc"ions+ #is #as )ade "#e )ar/e"

)ore co)%e"i"ive+


29/30

sui"able s"le o* %ro)o"ion needs "o 'e" "#is in*or)a"ion across e+'+ !ri""en lea*le"s in s"ores&

co)%e"i"ors %ro)o"ions 7 s#ould "#ese be )a"c#ed or !ould a di**eren" a%%roac# be bene*icialE 1

)ar/ eac# *or u% "o 2 *ac"ors, 2 )ar/s a%%lica"ion& 2 2 )ar/s *or analsis

7 e$"boo/

8 e$"boo/ 1 )ar/ *or eac# %lus 1 )ar/ *or brie* e$%lana"ion9 e$"boo/

10 .* %rice elas"ici" o* de)and #as a value less "#an 71 "#en de)and is said "o be %rice inelas"ic+

#is )eans "#a" "#e %ercen"a'e c#an'e in de)and !ill be less "#an "#e %ercen"a'e c#an'e in

%rice+ So a 10: %rice increase is li/el "o lead "o a 2+5: *all in de)and+ Cevenue !ill rise in "#is

case+

a) 9os"s, co)%e"i"ion, obDec"ives o* "#e business and "#e na"ure o* "#e )ar/e" are li/el "o be "#e

*our )ain *ac"ors+ For e$a)%le, i* "#e !a'e ra"es *or "#is "%e o* labour are increasin' "#en a

%rice rise is li/el "oo+ .* a local co)%e"i"or #as le*" "#e indus"r "#en "#ere )i'#" be an

o%%or"uni" *or 9 T L "o increase "#eir %rices+ ;o!ever, i* i" is eas "o Doin "#is "%e o*

ins"alla"ion business, 9 T L )i'#" #ave "o /ee% %rices 3ui"e lo!+ 1 )ar/ *or eac# *ac"or, 2

)ar/s *or a%%lica"ion, 4 )ar/s *or analsisAs "#e )ar/e" a" %resen" is 'ro!in' due "o "#e e$"ernal *ac"or o* c#an'in' "elevision si'nals, "#e

e$is"ence o* co)%e"i"ors, even )ore o* "#e), )i'#" no" be a )aDor *ac"or+ #ere )i'#" be

enou'# !or/ *or all *ir)s even "#ou'# %rices c#ar'ed could be #i'#+ .* "#e *ir)s colluded and

!or/ed "o'e"#er "o *i$ %rices "#en co)%e"i"ion !ould be )uc# less i)%or"an"+ ;o!ever, "#is is

s"ric"l ille'al and serious %unis#)en" )i'#" *ollo!8

;o!ever, i* barriers "o en"r are lo! and )an *ir)s Doin, or i* "#e )ar/e" beco)es sa"ura"ed

!#en )os" %eo%le #ave been conver"ed, "#en co)%e"i"ion )i'#" beco)e a )uc# )ore

si'ni*ican" in*luence on %rice+ )ar/s *or /no!led'e o* "#e *ac"ors, 2 )ar/s *or a%%lica"ion,

)ar/s *or analsis,, 4 )ar/s *or evalua"ion and *inal Dud'e)en"+

11 Ge*ini"ion %lus *or)ula+ 2 )ar/s Advan"a'es ans!er s#ould e$%lain "#e i)%ac" on revenue !i"#

%rice increasesJreduc"ions !i"# bo"# elas"ic and inelas"ic de)and could use nu)erical e$a)%les+6 )ar/s analsis Gisadvan"a'es #o! accura"e is


30/30

onK)ar/e"in' cos" reduc"ions 7 use c#ea%er cu"s o* )ea", conver" "o nonKor'anic or non *ree

ran'e i* "#ese !ere *ea"ures o* "#e e$is"in' %roduc"+ 9ould "#is da)a'e "#e i)a'e "#e business

is "rin' "o es"ablis#E

Quali" "#is could 'ive a co)%e"i"ive advan"a'e i* su%er)ar/e"s and consu)ers !ere %re%ared

"o %a *or a %re)iu) %roduc"+ Would "#is de%end on )ar/e" researc# and "#e s"a"e o* "#eecono) and consu)ersB *inancesE

All o* "#ese )a be %ossible bu" "#e business !ill #ave "o !ei'# u% !#ic# is li/el "o be "#e

)os" i)%or"an" and "#e %o"en"ial ne'a"ive e**ec"s o* eac# )e"#od used+ N"#er ans!ers are

%ossible+ )ar/s *or *ac"ors, 2 )ar/s a%%lica"ion, )ar/s a%%lica"ion, 4 )ar/s evalua"ion

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