Business 0450 · IGCSE · Production of goods and services
Production of goods and services — practice question
TUKAN produces a variety of soft drinks through flow production. Employees are paid well, but they receive no non-financial rewards. A large proportion of staff leave the business each year. A reason often given for leaving is that they have no part in decision-making. In the last year, TUKAN’s revenue rose by $25m, yet profit did not rise. The Managing Director said: ‘The economy is currently in the growth stage of the business cycle. Even so, efficiency has to improve. Lean production methods could be useful. We also need to hire a new Operations manager who may have ideas about this.’
(a)[2]
What does the term ‘business cycle’ mean?
(b)[2]
Identify two benefits of flow production.
(c)[4]
Identify and explain two advantages to TUKAN of using non-financial reward methods.
(d)[6]
Identify and explain two lean production methods that TUKAN could use to raise efficiency.
(e)[6]
Do you think TUKAN should use internal recruitment or external recruitment for the new manager? 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: “Variation in economic activity over time” …