Business (AS & A Level) · May / June 2026 · Paper 23 · Question 1

Jo’s Transport (JT) JT is owned by Jo as a sole trader business that provides school bus services to local public sector schools in city K. JT’s main customer is the local government. Established in 2015, JT is building a brand reputation as a safe and reliable transportation method for school children in city K. JT offers a range of services: • Daily school bus transportation • Field trip transportation • After‑school activity transportation JT receives payments for the services from the local government in city K but there is a three‑month time lag between providing the service and receiving payment. JT has to use its overdraft to cover payments during the three‑month period. Table 1.1 shows some of JT’s financial information for 2025. Table 1.1 Financial information for JT in 2025 $m total revenue 5 total direct cost 1 total indirect cost 2 JT has 50 buses and 100 employees. Jo encourages employee participation at all levels of the business operation. Jo would like to implement customer relationship marketing (CRM) at JT, to improve its relationship with the local government. To set up a CRM system will require $3m investment in computer systems, software and staff training. Jo believes that CRM could help JT become the leader in a very competitive school transport market. 5 10 15 20

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