Business (AS & A Level) · Oct / Nov 2023 · Paper 23 · Question 2

Custom motorcycles (CM) CM is a private limited company. It was set up by Joyce, who identified a gap in the market for specialist motorcycle components. CM’s engineers make the components using job production. The engineers are highly skilled, trained and motivated and very proud of their high-quality products which are sold using price skimming. CM was featured in a popular motorcycle magazine in autumn 2022, which has increased CM’s reputation for quality unique products. This led to an increase in CM’s sales as shown in Fig. 2.1. Summer 2022 0.5 5 Autumn 2022 0.6 5.5 Winter 2022 Total market sales (000 units) CM sales (000 units) 1 6 Spring 2023 1.05 6.25 Summer 2023 1.5 7.5 Fig. 2.1: CM’s sales data 2022–2023 Lead times for CM’s products have increased from 4 weeks to 10 weeks. This has put additional pressure onto CM’s engineers, who are salaried employees. They often have to work evenings and weekends. Harry, the Sales Manager, thinks demand is going to continue to increase. He wants CM to employ more skilled engineers and continue to use job production. However, Joyce wants CM to invest in new technology and change from using job production to batch production. 5 10

Read automatically from the paper; the printed page above is exact.