Business 7115 · O Level · 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. Every year, YMG makes 1 billion litres by using flow production. The Managing Director wants the business to grow. He explained: ‘My plan is to raise output to 3 billion litres within the next 5 years. That would let us sell our products in fresh markets in other countries. I realise that import quotas and a lack of local knowledge may create difficulties, but there are methods we can use to deal with them.’ He also intends to put $60m into new technology so efficiency improves.
(a)[2]
Define the term ‘flow production’.
(b)[2]
Identify two ways, other than 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 following issues could influence YMG when it enters new markets in other countries. Problem due to lack of local knowledge. Problem due to import quotas.
(e)[6]
Do you think a joint venture is the best method for a business to use when entering 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: “When a product is made in large quantities through a continuous process” …