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Business Studies · May / June 2021 · Paper 21 · Question 2

0450

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  • 2(a)[8]

    Explain two reasons why it is important for FO to manage all of its resources effectively when manufacturing products. One mark for each reason (maximum of 2). Award a maximum of 3 additional marks for each explanation of the reason why it is important to manage resources effectively when manufacturing products – one of which must be applied to this context. Relevant reasons might include:

    Better understand number of employees needed – so labour cost can be better controlled – employees are fully employed / always busy
    To ensure the maximum output is produced from the least inputs – maximises efficiency – increases profit
    Reduces waste / prevents over or under allocation of resources – not too much inventory ordered – reduces costs
    Avoiding underproduction – equipment needs maintaining regularly – prevents a lack of output to meet demand
    Avoiding overproduction – leads to increased storage required for inventory – increases costs / may mean a chaotic working environment – leading to employee demotivation or confusion
    Will not run out of raw materials – not a shortage of finished product – improved consumer satisfaction
    Deliveries are made on time – leads to customer satisfaction – improved reputation / repeat orders For example: If FO manages its resources effectively then it should ensure the maximum output is produced from the least inputs (1), which should keep down the unit costs (1)

    and maximise profit (1)

    from manufacturing wooden outdoor furniture. (app) Application might include wooden furniture, outdoor furniture, nails, brackets, paint, wood, local forests, tables, online ordering.

  • 2(b)[12]

    Consider the benefits and limitations of the following three methods of communication FO could use. Which method of communication would be most suitable when contacting suppliers about a late delivery? Justify your answer.

    Email
    Mobile (cell) phone
    Letter Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of two or more methods. Well-justified recommendation. Candidates discussing all three methods in detail, in context and with a well-justified recommendation including why the alternative methods were rejected should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one method. Judgement with some justification / some evaluation of choices made. Candidates discussing of two or more methods in detail and applying them to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the methods with little/no explanation. Simple judgement with limited justification / limited evaluation of choices made. Candidates outlining all three methods in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Advantages Disadvantages Email
    Can be sent quickly to the suppliers of wood
    Can be sent to many people at once
    Hard copy if email printed out
    Can be saved for reference to later
    No guarantee it has been read by suppliers of nails
    Could have gone into junk folder
    May not be secure
    If many emails are sent, then it could be lost amongst them
    Requires an internet connection Mobile (cell) phone
    Know the message has been received
    Caller can ask questions about the brackets
    Feedback can be given
    Receiver more likely to have mobile phone on them so easier to reach
    May take time to reach the correct person
    Time/language differences
    Can be expensive
    Time consuming if need to contact many different suppliers of wood
    No hard copy for reference Letter
    Hard copy
    More formal for legal documents
    A lot of detail can be included about the late delivery of nails and paint
    Slower than other two methods
    Can be more expensive than other two methods
    No guarantee the letter has been received by the supplier of brackets Recommendation
    Email best choice if the order is urgent and if a delivery of raw materials is late. FO may need to know when the order will arrive, or manufacturing of furniture may be delayed. A letter will be too slow and using a mobile phone may not get through to the correct person straight away if they are busy, hence will need to keep ringing until they can be contacted, so wasting time.
    Mobile phone call may be best as it will get instant feedback about the order of wood and the questions can be asked.
    Letter may be best if express delivery could be arranged about the late delivery of nails and paint. It is more formal that the other two methods and they can be sure it has been received if signed for.
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