Business 0450 · IGCSE · Production of goods and services
Production of goods and services — practice question
At a small factory, Rafiq works as the Operations manager. The business produces a range of soft drinks by batch production. Last year, Rafiq successfully brought in just-in-time inventory control after receiving an idea from one of the 40 employees. Because the business is preparing to expand, Rafiq believes that moving to flow production would be sensible.
(a)[2]
What does ‘cost of sales’ mean?
(b)[2]
Using Table 1, calculate: X; Y.
(c)[4]
Identify and explain two possible reasons why profit is important for this business.
(d)[6]
Identify and explain two advantages to this business of using just-in-time inventory control.
(e)[6]
Should this business switch to flow production? 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: “Money paid out to make or buy the goods that are sold by the business” …