Oct/Nov 2018

SOLS manufactures 5 styles of luxury men’s shoes by using job production. SOLS works in a niche market. Quality assurance matters. All materials, including leather, are brought in from abroad. SOLS applies cost plus pricing. The shoes are sold straight to customers through its website. The Managing Director said: ‘We can sell our shoes for $100 less a pair than our competitors because we have no shops.’ Demand is growing and the Managing Director must decide whether to switch to batch production.

Production of goods and services

AllPlay is a toy shop that Vince established in 2012. Every year, Vince has achieved his business objectives, including earning a profit in 2017. All of AllPlay’s products are imported. Vince plans to grow the business by opening a second shop so that he can offer a broader product range. The price of purchasing the shop is $20 050. A bank loan is one possible source of finance. Vince’s bank manager will expect to examine AllPlay’s income statement and other financial records.

Business finance: needs and sources

Filltum is the name of a chain of vegetarian restaurants. It runs 28 restaurants, and 16 of them are operated by franchisees. The Managing Director is satisfied with the rapid pace of growth at a time when many firms are going out of business. She commented: ‘Having a well-motivated workforce is important to our success.’ Every new employee receives on-the-job training. Filltum intends to add 10 more restaurants over the next year. The Managing Director must choose between selling extra franchises or opening its own restaurants.

Enterprise, business growth and size

AHP is a multinational company. It manufactures mobile (cell) phones in Europe in country X. 80% of its sales are in Europe. Some people are worried about AHP’s effect on the environment. The Operations Director stated: ‘AHP always aims to make sure it complies with all legal controls. Globalisation has opened up many opportunities for AHP and its stakeholders. The Operations Director is planning to move its factories to a low-cost country in Asia. Raw materials would have to be carried an extra 4000 kms. Interest rates are likely to rise across Europe.’

Business and the international economy

M&R Motors operates 2 car showrooms. It purchases old cars and repairs them before offering them to its customers. M&R is continually trying to raise added value. M&R intends to open another showroom. The owner said: ‘Choosing the right location is important. The new showroom will need a manager and I must find someone with the right qualities.’ The job will be advertised in the local newspaper, as shown in Figure 1. The advertisement will cost $5 for one week. Figure 1: Job advertisement M&R is planning to use for the new manager CAR SHOWROOM MANAGER REQUIRED • This successful business is expanding. • The job involves running the office and selling cars. • You will be in charge of three workers who will repair the cars. • Do you have the qualities we are looking for? • We offer good pay and working conditions. For more information apply to M&R Motors

Recruitment, selection and training of employees

FTT is a social enterprise. It sells its high-quality fair-trade coffee beans to retailers in country P. Acting ethically is important to FTT. It gives local people information about micro-finance and skills so that they can begin growing beans for FTT to sell on their behalf. FTT plans to start exporting coffee beans because its market research shows that demand for coffee is rising in other countries. FTT’s managers will need to select a suitable pricing method for selling the coffee beans in those overseas markets.

Types of business organisation

TRB is a small business operating in the secondary sector. TRB assembles computers. Apart from the battery and the glass for the screen, every component is brought in from overseas. 40% of its products are exported. A lot of its competitors are moving to low cost countries. The Operations Director at TRB believes that globalisation may offer more opportunities than threats for TRB. She is considering methods to raise efficiency in the factory. One possibility is to adopt lean production methods.

Production of goods and services

Bakin Group (BG) is a limited company. It runs 3 holiday parks that provide family holiday accommodation and activities. BG wants to look after customers’ needs 24 hours a day. Customers pay when they arrive at the park for their holidays. Each park employs 3 managers and 40 part-time employees. BG uses a wide mix of social media networks for promotion. The Finance Director is concerned about BG’s cash flow position. He cannot decide whether an overdraft is the best option for BG to solve its cash flow problem.

Cash-flow forecasting and working capital

Identify and explain two benefits and two drawbacks of GT as a public limited company.

Types of business organisation

Identify and explain two roles performed by the Operations manager at GT.

Production of goods and services

Identify and explain two factors GT should take into account when developing products for markets in different countries.

Internal and external communication

Identify and explain one effect on GT and one effect on GT’s employees of workers belonging to a trade union. Effect on GT: Explanation: Effect on GT’s employees: Explanation:

Analysis of accounts

Identify and explain two methods PP might use to improve product quality.

Achieving quality production

Identify and explain two primary research methods PP could use to investigate the market in country Z.

Market research

Identify and explain one advantage and one disadvantage of Peter handing over tasks to the new Operations manager.

Organisation and management

Identify and explain two sources of finance that PP could use to fund its expansion.

Business and the international economy