Business Unit 4

Question 1

A) What is Job Production?
B) Advantage of Job Production
C) Disadvantage of Job Production

Answer 1

A) Production where products are made individually
B) Products will be high quality & the business can charge a high price.
C) Can be costly to make and customers may have to wait a long time for the product

Question 2

A) What is Batch Production?
B) Advantage of Batch Production.
C) Disadvantage of Batch Production.

Answer 2

A) Production where quantities of similar products are made
B) Batches can be varied to meet the needs of customers.
C) Tasks may be repetitive and boring for workers.

Question 3

A) What is Flow Production?
B) Advantage of Flow Production.
C) Disadvantage of Flow Production.

Answer 3

A) Productions of one product that takes place continuously.
B) Large quantities are produced for sale
C) Mass produced goods may not be of high quality.

Question 4

A) Define Automation
B) Define Robotics

Answer 4

A) Production process involving machinery that is controlled by a computer rather than a person
B) The use of robots in the production process.

Question 5

What are some advantages of using technology in production?

Answer 5

1. Machines can replace worker, reducing costs
2. Technology can operate 24/7 and never needs time off work, also reducing costs while increasing output
3. Human safety is improved as machines can do dangerous jobs

Question 6

What are some disadvantages of using technology in production?

Answer 6

1. Machines can break down, disrupting production
2. New technology may be expensive to buy
3. The business may need to recruit skilled labour to program the computers.

Question 7

What does “Quality” mean in goods or services?

Answer 7

1. It’s fit for purpose ( Does what it’s meant to do )
2. Complies with legal requirements
3. Is customer satisfactory ( Does what the customer expects it to do )

Question 8

Why might a business want to provide quality goods and services?

Answer 8

1. Waste is reduced;
   The number of goods that are rejects are reduced, which reduces;
   - Recalls of defective products
   - The return of produces from dissatisfied customers
2. The business gains a good reputation;
   Satisfied customers will;
   - Buy in the future from the business, ( retains customers )
   - Recommend the business to others, increasing customers.

Question 9

A) What is Quality Control?
B) Advantages of Quality Control
C) Disadvantages of Quality Control

Answer 9

A) A method of ensuring quality that involves a physical inspection by an inspector or machine.

B1) Stop poor quality goods from being sold
B2) Production can continue while inspection takes place

C1) It does not prevent waste
C2) Inspection can be costly ( unless done by machines )

Question 10

A) What is Quality Assurance?
B) Advantages of Quality Assurance
C) Disadvantages of Quality Assurance

Answer 10

A) A method of ensuring quality where all workers are responsible for the quality of a product.

B1) It should reduce wastage and costs
B2) All workers are responsible for quality which may motivate them.

C1) Workers may be stressed by the responsibility of checking the quality
C2) Could slow down the overall time taken when producing a product.

Question 11

A) What is face-to-face selling?
B) What are advantages of face-to-face selling
C) What are disadvantages of face-to-face selling
( Include for customers (c) and the business (b) )

Answer 11

A) When direct contact is made between buyer and seller during a purchase

B1) The customer can bargain with the seller over the price of a product (c)
B2) The business can explain and even demonstrate complex products (b)

C1) May not always be convenient for customers (c)
C2) If the customer bargains with the seller for a better deal

Question 12

A) What are telesales?
B) What are advantages of telesales?
C) What are disadvantages of telesales?
( Include for customers (c) and the business (b) )

Answer 12

A) Sales that are completed over the telephone

B1) May cost less than selling from a shop (c and b)
B2) Products can be sold from a distance, saving customer’s time (c and b)

C1) Costs involved such as a warehouse to store goods and payment to telesales workers (b)
C2) Sellers may ‘cold call’ which can be a nuisance to customers.

Question 13

What is e-commerce?

Answer 13

Buying and selling electronically

Question 14

Name and explain 3 Influences that e-commerce has had on business activity as a whole.

Answer 14

1. Levels of employment
- Some businesses have reduced the number of their employees in favour of using technology instead.

2. Business Opportunities
- E-commerce has increased business opportunities, Increasing job opportunities and markets are now world wide.

3. Location
- Business who sell online can use warehouses in cheaper locations while keeping good transports link
- Online retailers don’t need shop ( or as many ) in expensive shopping centres.

Question 15

A) What are some advantages of e-commerce to businesses?
B) What are some disadvantages of e-commerce to businesses?

Answer 15

A1) Online markets have increased, and it’s now easier for businesses to sell around the world
A2) It’s possible to sell 24/7 now
A3) Less employees will needed to be employed

B1) Competition will increase greatly, including competition from abroad.
B2) Cyber security is now needed for themselves and their customers
B3) As technology develops so must the e-commerce business, which can add to costs.

Question 16

A) What are some advantages of e-commerce to customers?
B) What are some disadvantages of e-commerce to customers?

Answer 16

A1) Online selling had made it much easier for customers to compare prices and find the best deals
A2) Customers can buy 24/7
A3) Choice has increased as customers can from sellers around the world

B1) It is impersonal and so customers may not be able to ask questions
B2) Not everyone has access to or can use computer technology
B3) If the computer systems are not secure, customers may be at risk of personal data theft and bank fraud.

Question 17

What are the 3 methods of providing customer service?

Answer 17

1. After sales service
   - Service provided to customers after they have bought the product. Will also include dealing with unsatisfied customers.
2. Product Knowledge
   - Sales assistants know about the goods or services they sell and are able to provide customers with information and advice.
3. Customer Engagement
   - Refers to friendly and welcoming communication between the buyer and the seller in face-to-face sales, telesales and e-commerce.

Question 18

Name 1 Advantage & Disadvantage of;
After Sales Service

Answer 18

Advantage:
- This might help attract and retain customers, as customers can buy with confidence ( sales goes up )

Disadvantage:
- The costs when it comes to training workers to deal with customers and refund returns.
- Returned goods may have to be sold at a loss.

Question 19

Name 1 Advantage & Disadvantage of;
Product Knowledge

Answer 19

Advantage:
- Attracts and retains customers which increases sales as customers are given information that helps them make good decisions. ( Import for detailed products)

Disadvantage:
- There are costs in training staff and can be very expensive to set up and run.

Question 20

Name 1 Advantage & Disadvantage of;
Customer Engagement

Answer 20

Advantage:
- Good customer engagement can make customers feel special and want to return
- Can also be useful for gaining quick feedback from customers (e.g. areas where the business can improve).

Disadvantage:
- Customers may feel dissatisfied if they don’t get a prompt response.
- Additional workers may need to be employed, increasing business costs.

Question 21

What are the 3 Main Features of the Consumer Protection Act 2015

Answer 21

**Goods bought in a shop: **
- Entitled to a full refund if faulty within 30 days; entitled to full refund within 6 months if product can’t be repaired or replaced
- May be entitled to a partial refund if the product doesn’t last a ‘reasonable’ length of time (up to 6 years).

Goods bought at home:
- Entitled to a 14 day cooling-off period i.e. can change your mind and get a refund.
- In addition to this, you have the same rights as when
goods are bought in a shop.

Services bought in a shop ( i.e fixing your car/ fitting a bath ):
- Entitled to have problems fixed, repaired, or partial refund if the service was not carried out properly first time
- Or if it wasn’t carried out in a reasonable time at a reasonable price;

Question 22

What are some potential consequences to business for breaking the Consumer Protection Act 2015.

Answer 22

1. Damage to brand image - might put off potential customers. ( Will bring down sales revenue and profit )

2. Legal action/fine - will increase the businesses costs which will in turn bring the overall profits by the business.

3. Replacements/Refunds - The business may need to either replace or repair faulty goods, or even provide a refund. May cause them to lose out on sales.

Question 23

List 6 things a business may need to consider when choosing where to locate.

Answer 23

1. Cost of rent/land
2. Proximity to customers
3. Population size
4. Proximity to competitors
5. Infrastructure ( e.g. good transport links )
6. Possible Government Grants/Benefits

Question 24

Why is it important to consider the cost of rent/land when locating a business.

Answer 24

Cost of Rent/Land;
- Cheap rent = lowers costs which means higher profits
– It also means the businesses has a bigger budget to spend on other things ( i.e Advertising )

• Cheaper rent will draw in more competitors, which could potentially lead to having customers stolen.
• Cheap rent might mean the business is in a poor area, could have high unemployment rates and low customer demand

Question 25

Why is it important to consider proximity to the market when locating a business?

Answer 25

Market;
- Business may locate near their customers for easier communication
- It enables them to respond quickly to purchase orders

• A business located near its customers may also be able to reduce the cost of transporting products to this market

Question 26

Why is it important to consider proximity to labour when locating a business?

Answer 26

Labour;
- If a busines needs a supply of skilled workers, they may locate in an area that has lots of skilled workers.
- A business that needs a lot of unskilled labour might locate in an area of high populatoion and/or high unemployment.

Question 27

Why is it important to consider proximity to materials when locating a business?

Answer 27

Materials;
- A business may locate near to a source of raw materials to save on transportation costs. ( Particularaly when the materials are bulky or heavy )

• Shorter transport journeys are good for the environment as this minimises carbon emissions, enabling the business to be more eco friendly.

Question 28

Why is it important to consider;
A) Suppliers
B) Population Size
C) Competitiors
When location a business

Answer 28

A) Having a variety of suppliers means the business can shop around for the best price and quality stock
A1) Being nearby can reduce delivery times ( ensuring businesses dont run out of stock ) and also reduces delivery charges.

B) Higher number of potential customers = higher potential sales revenue.
B1) Higher number of potential employees = greater range of people to choose form = likely to get the best person for the job

C) Locating away from competitors mean a business wont have to spend as much money on trying to attact customers away from other business.

Question 29

A) What is Procurement?
B) What are Logistics?
C) What are the 4 main stages of Procurement.

Answer 29

A) The management of purchasing within a business

B) The management of transportation and storage of goods

C) 4 Stages are;
1.Identifying goods and services to buy
2. Choosing Suppliers
3. Ordering goods and services
4. Receiving deliveris from suppliers

Question 30

What are some decisions that may be made when Identifying goods and services to buy?

Answer 30

• Which season the business is buying for. ( e.g. Different clothes for summer time )
• Changes in technology ( e.g. How many new/old products should be bought )
• Changes in fashion and lifestyle. ( e.g. A food store deciding if they should sell more vegan meals )

Question 31

What are some decisions that may be made when Choosing Suppliers?

Answer 31

• Reputation and reliability of suppliers ( e.g. Popular Brands will buy from ethical suppliers )
• Quality of goods sold by the supplier compared to Quality of goods wanted by the customer. ( e.g. A furniture store may need high quality stock )

Question 32

What are some factors to consider when choosing which supplier to use?

Answer 32

1. Cost of Supplies/Stock
- Cheaper Stock = Lower Unit Costs -> Higher Profit Margins
- Cheaper Stock -> Can reduce selling price to have a competitive advantage in the market.

2. Quality of Supplies/Stock
- Good Quality Stock = Good Quality Produce -> More satisfied customers & are willing to pay higher prices
- Good Quality Produce -> Higher Customer Loyalty

3. Delivery Time
- Faster delivery times = less likely to run out of stock = keeps customers happy / maximises sales / keeps production flowing in factories.

Question 33

What are some issues and potential problems when it comes to logistical descisions?

Answer 33

1. Time
- The Supplier must be able to deliver goods on time.
- Problem -> The Supplier could be low on materials, & could result in the business losing sales and revenue.

2. Reliability
- The Supplier must be able to supply the quantity and quality of good needed.
- Problem -> If the supplier’s materials are not of sufficient quality, it may delay production.

3. Length of the supply chain
- A long supply chain has an increased risk of problems occuring along the chain.
- Problem -> A business may not recieve the materials needed so it cannot produce the product.