CQT is a public limited company. It makes paint by using flow production. This production method lets CQT enjoy economies of scale. CQT has 50 workers. At present, all of CQT’s raw materials are purchased from local suppliers. However, the Operations Director is aware that globalisation has many causes. He has been asked to explain the factors a business should weigh up when deciding whether to move its factory to another country.
(a)[2]
Define the term ‘public limited company’.
(b)[2]
Identify two reasons for globalisation.
(c)[4]
Outline two economies of scale CQT could benefit from.
(d)[6]
Explain two limitations for CQT of using flow production.
(e)[6]
Explain two factors a business should consider when deciding whether to move its factory to another country. Which factor is likely to be the most important? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Owned by shareholders and able to sell shares to the public” …