Business (AS & A Level) · Oct / Nov 2024 · Paper 23 · Question 1

Brenda’s Bricks (BB) BB is a newly established social enterprise in country X. It was set up by Brenda. Brenda has no experience of running a national business, but she used all her savings to recruit a team of young intrapreneurs. Country X specialises in recycling plastic waste from other countries. It has a dynamic business environment and many businesses have recently failed. Brenda saw an opportunity to recycle low-cost plastic waste into construction bricks. These could be used to help the poorest in society to build waterproof houses. BB recently featured in a government promotion highlighting successful innovators. BB has trialled the method using job production and needs investment to produce its bricks commercially. A large national business, CC, is keen to invest in community projects to improve their corporate social image. CC needs to see a business plan before making a decision. Brenda has started to investigate the costs of production for the business plan that CC has requested. (See Table 1.1.) Table 1.1: Data about BB’s costs and methods of production Batch production Flow production Purchase cost $100 000 capital cost $150 000 capital cost Hire purchase cost $500 per month over a 20-year period $600 per month over a 25-year period Output A variety of sizes manufactured to customer preferences One size of brick used in 80% of house construction Manufacturing time Average 40 bricks per hour 100 bricks per hour 5 10 15 20

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