Business 0450 · IGCSE · Production of goods and services
Production of goods and services — practice question
KCL makes paper that is used to produce newspapers and books. KCL keeps a large inventory level and purchases all raw materials, including wood, from nearby suppliers. Quality control matters. The Operations Director is thinking about methods to raise efficiency in the factory. Pressure groups are attempting to shape KCL’s decisions so that the business does not generate more external costs than external benefits.
(a)[2]
Define what is meant by ‘quality control’.
(b)[2]
Identify two ways in which a pressure group could try to influence business decisions.
(c)[4]
State four benefits to a business of becoming more efficient.
(d)[6]
Explain one external cost and one external benefit that may arise from KCL’s business.
(e)[6]
Explain two factors that a manufacturing business should think about when deciding how much inventory to hold. Which factor is probably 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: “Inspecting goods once production has finished” …