1

1 SSG manufactures mobile (cell) phones using batch production. Quality control is important. SSG has 130
employees who all receive on-the-job training. The Marketing Manager is analysing cost and output data for
product X. An extract is shown in the table below. As product X is in the maturity stage of the product life
cycle SSG is considering possible extension strategies.

Extract from SSG’s cost and output data for product X

Rent and other expenses per month $300 000

Variable cost per unit $80

Output per month 12 000

Identify four factors a business should consider when deciding which method of production to use.

Factor 1: ...................................................................................................................................................

..................................................................................................................................................................

Factor 2: ...................................................................................................................................................

..................................................................................................................................................................

Factor 3: ...................................................................................................................................................

..................................................................................................................................................................

Factor 4: ...................................................................................................................................................

.................................................................................................................................................................. [4]

[Total: 4]

2 HCB manufactures cars in country X. It has 200 employees working in its factory. The business has changed
its method of production due to new technology. HCB’s Managing Director is considering ways to become
more ethical. She is aware that other businesses in country X have started to import cars. The interest rate in
country X has increased due to rising inflation.

Identify two ways technology could change production methods.

Way 1: ......................................................................................................................................................

..................................................................................................................................................................

Way 2: ......................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 2

3 GBR manufactures shoes. The method of production used means GBR can produce 18 000 pairs of shoes
each week. GBR is a limited company. Its main objective is to increase profit. This objective can conflict
with those of other stakeholder groups including GBR’s 450 employees. The business does not export any
of its products. The directors are interested in the opportunities of globalisation for GBR.

Do you think the size of the market is the most important factor for a business to consider when deciding on
a method of production? Justify your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

4 Calculate output per worker per week in 2020. Show your working.

Extract of BEF’s production data for one of its products

2019 2020

Average number of production workers 240 250

Total output per week 300 000 310 000

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 3

5 SSG manufactures mobile (cell) phones using batch production. Quality control is important. SSG has 130
employees who all receive on-the-job training. The Marketing Manager is analysing cost and output data for
product X. An extract is shown in the table below. As product X is in the maturity stage of the product life
cycle SSG is considering possible extension strategies.

Extract from SSG’s cost and output data for product X

Rent and other expenses per month $300 000

Variable cost per unit $80

Output per month 12 000

Explain one advantage and one disadvantage to SSG of using quality control.

Advantage: ...............................................................................................................................................

..................................................................................................................................................................

Explanation: ............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Disadvantage: ..........................................................................................................................................

..................................................................................................................................................................

Explanation: ............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

6 Define ‘quality control’.

..................................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 4

7 BCZ is a multinational company which operates in 12 countries. It manufactures cement, a building material
used by construction companies, so quality assurance is important. Making cement creates external costs.
One of BCZ’s factories is located in country X. The government of country X plans to introduce new legal
controls that will reduce the maximum number of working hours from 45 to 35 hours per week.

Do you think it is better for a large manufacturer to use quality assurance rather than quality control? Justify
your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

8 State two ways quality production can be achieved.

Way 1: ......................................................................................................................................................

..................................................................................................................................................................

Way 2: ......................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]