Business 0450 · IGCSE · Production of goods and services
Production of goods and services — practice question
YMG is a private limited company and the biggest producer of soft drinks in country Y. YMG makes 1 billion litres each year by using flow production. The Managing Director wants YMG to grow. He said: ‘My aim is to raise output to 3 billion litres during the next 5 years. This would let us begin selling our products in fresh markets in other countries. I realise import quotas and a shortage of local knowledge may create difficulties, but there are methods that could help us deal with them.’ The Managing Director also intends to put $60m into new technology to raise efficiency.
(a)[2]
Give the meaning of ‘flow production’.
(b)[2]
Identify two ways, apart from technology, that a business can use to improve efficiency.
(c)[4]
Outline two finance sources YMG could use to pay for the new technology.
(d)[6]
Explain how each of the issues below could influence YMG when it moves into new markets in other countries.
Issue caused by lack of local knowledge.
Issue caused by import quotas.
(e)[6]
Do you think a joint venture is the best way for a business to enter a new market in another country? 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: “Output of large quantities in a continuous process” …