Reliable Car Repairs (RCR) is owned by Freya and her brother Kye as a partnership. The business was set up five years ago in city B and repairs a wide range of cars. Freya recently carried out some primary market research. The qualitative data from the market research showed that customers like the speed of RCR's service as many repairs were completed within 24 hours. RCR's market share has increased annually over the past five years. The total sales in the market in 2023 were $700000. Table 2.1 shows RCR's data for 2024. [Table 2.1] The owners are always looking to improve the performance of the business and have an objective of increasing efficiency. Freya and Kye have no experience of repairing cars and so employ two mechanics to carry out this work. The mechanics have both been employed by the business since it was set up. Kye supervises the mechanics using a democratic management style. The business holds a large quantity of inventory as different cars need different components. The business buys components from two suppliers which have both supplied RCR since it was set up. The partners are thinking of introducing Just in Time (JIT).

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2025). The mark or mark type is shown in brackets.

1. [1] Primary research is the first-hand collection of data by an organisation for its own needs. Award any method that meets this definition. Identification of a primary market research method may include: Questionnaires/surveys/feedback / Focus groups / Interviews / Observations / Consumer trials/samples.
2. [1] AO1 Knowledge and understanding: Qualitative data describes customer opinions/qualities/characteristics/subjective OR Qualitative data is not measurable in financial or numerical terms.
3. [2] AO2 Application: Explanation of qualitative data, including: Qualitative data describes customer opinions/qualities/characteristics/subjective AND Qualitative data is not measurable in financial or numerical terms.
4. Context applied to qualitative data, including: An example of a specific piece of qualitative data / An example of a use of qualitative data / An example of a way of presenting/summarising/analysing.
5. Application can be made to RCR or any other scenario/context/business/person.
6. Accept all valid responses.
7. Exemplar: Qualitative data is not numerical. For example, the owners can obtain data about customers' satisfaction with the speed of car repairs. (3 marks)
8. [1] Total value of sales in market (2023) = $700 000 (given in text).
9. [1] Total value of sales in market (2024) = (123 165 / 17) × 100 = 7245 × 100 = 724 500.
10. [1] Market growth = 724 500 – 700 000 = 24 500.
11. Formula: (New market size / Original market size) × 100 OR The percentage change in the total size of a market.
12. Answer = $24 500 (3) OR 3.5% (3).
13. 3 marks: Correct answer $24 500 or 24 500 OR 3.5% or 3.5.
14. 2 marks: ONE of the following: Correct calculation of 2024 market size (724 500) OR An incorrect answer with one mistake allowing OFR for final stage.
15. 1 mark: One of the following: Correct formula.
16. [1] AO1 Knowledge and understanding: Knowledge of a reason why objectives might change may include: changing internal factors / changing external factors / the achievement of previous objectives.
17. [2] AO2 Application: Explanation of a reason why business objectives may change over time, including: changing internal factors (e.g., business has more resources, significant number of workers left, new manager employed) OR changing external factors (e.g., new competitors enter the market, increase in market size, customer demand changes) OR the achievement of previous objectives (e.g., if a business has survived then it may now try to be profitable).
18. Context applied to RCR, including: RCR is a partnership / Business operated for five years / Repair a wide range of cars / Freya carried out primary market research to understand her customer's needs and wants / Collected qualitative data / Customers like the speed of RCR's service / RCR's market share has increased annually over the past five years / RCR has a 17% share of the market / Employ two mechanics / Kye uses a democratic style of management / Experienced mechanics who have worked for the business since it started five years ago / Holds a large quantity of inventory / Each car type needs different parts / Buys parts from two suppliers / Suppliers have supplied RCR since it started five years ago / RCR has an objective of increasing efficiency / Partners thinking of introducing Just in Time (JIT).
19. Accept all valid responses.
20. Exemplar: Once RCR has achieved its business objectives they will need to change. For example RCR may have previously had an objective to have at least a 15% share of the market when it was set up five years ago, but now the business has a 17% share of the market. (3 marks)
21. Level 2 (3-4 marks AO3): Developed analysis that identifies connections between causes, impacts and/or consequences of two points. OR Developed analysis that identifies connections between causes, impacts and/or consequences of one point.
22. Level 1 (1-2 marks AO3): Limited analysis that identifies connections between causes, impacts and/or consequences of two points. OR Limited analysis that identifies connections between causes, impacts and/or consequences of one point.
23. AO1 Knowledge and understanding (max 2 marks): Democratic management style is where the manager actively involves employees in decision making. Knowledge of advantages of using a democratic management style: Increased motivation / Low labour turnover / More ideas from workforce / Better ideas from workforce (potentially) / More experiences are considered in decision making / May allows for more efficient problem solving (do not accept ‘quicker’ unless this is explained).
24. AO2 Application (max 2 marks): Application of advantages of democratic management style to RCR. Max one for application in one advantage and max two for application in two advantages. Context for RCR: RCR is a partnership / Business operated for five years / Repair a wide range of cars / Freya carried out primary market research to understand her customer's needs and wants / Collected qualitative data / Customers like the speed of RCR's service / RCR's market share has increased annually over the past five years / RCR has a 17% share of the market / Freya and Kye have no experience of repairing cars / Employ two mechanics / Experienced mechanics who have worked for the business since it started five years ago / Holds a large quantity of inventory / Each car type needs different parts / Buys parts from two suppliers / RCR has an objective of increasing efficiency.
25. AO3 Analysis: Analysis of advantages may include: RCR's customers like the speed of service offered. The employees are likely to be more motivated as consulted about decisions. Motivated employees are likely to be more productive and offer a quicker work rate. / Two employees are experienced and worked for RCR since it was launched so contributions are likely to lead to more successful decision making, increasing profitability/customer satisfaction. / Lower recruitment costs/time to train new employees etc. due to the low level of labour turnover. Limited analysis shows one link in the chain of analysis. Developed analysis shows two or more links in the chain of analysis or a two-sided analysis.
26. Accept all valid responses.
27. Exemplar: Better decision making as the opinions of the two mechanics can be considered. This could help the business to identify other ways of increasing efficiency which could help it to operate more profitably. (K + APP + DEV)
28. Level 3 (5-6 marks AO4): Developed evaluation in context. A developed judgement/conclusion is made in the business context. Developed evaluative comments which balance some key arguments in the business context.
29. Level 2 (3-4 marks AO4): Developed evaluation. A developed judgement/conclusion is made. Developed evaluative comments which balance some key arguments.
30. Level 1 (1-2 marks AO4): Limited evaluation. A judgement/conclusion is made with limited supporting comment/evidence. An attempt is made to balance the arguments.
31. AO1 Knowledge and understanding (max 2 marks): Knowledge of JIT, including: JIT is an inventory management system / JIT is where inventory is ordered to be delivered at the time that the part is needed by the business / Less/zero inventory held / JIT is often used when the customer order initiates the ordering of inventory.
32. AO2 Application (max 2 marks): Application of knowledge of the use of JIT to RCR. Developed application applies knowledge of the use of JIT to RCR twice. Context for RCR: RCR is a partnership / Business operated for five years / Repair a wide range of cars / Freya carried out primary market research to understand her customer's needs and wants / Collected qualitative data / Customers like the speed of RCR's service / RCR's market share has increased annually over the past five years / RCR has a 17% share of the market / Freya and Kye have no experience of repairing cars / Employ two mechanics / Kye uses a democratic style of management / Experienced mechanics who have worked for the business since it started five years ago / Holds a large quantity of inventory / Each car type needs different parts / Buys parts from two suppliers / RCR has an objective of increasing efficiency.
33. AO3 Analysis (max 2 marks): Limited analysis shows one link in the chain of analysis. Developed analysis shows two or more links in the chain of analysis. Analysis for the introduction of JIT, including: Reduces inventory holding costs – increased profitability / May reduce wastage of materials/inventory – reducing total costs / Reduces capital tied up in inventory – which could be spent on extra marketing to increase sales (opportunity cost) / Responsive to changes in demand – reducing costs / increasing efficiency / Improved cash flow – improving RCR's liquidity/ working capital (opportunity cost) / May improve supplier relationship – reduced prices / increased demand. Analysis against the introduction of JIT, including: Business would be vulnerable to supply chain disruptions – lower sales / poor customer satisfaction / May exacerbate poor supplier relationships – need to find a new/ more reliable supplier. / Increased transportation costs (due to more deliveries) – reduced profitability / Increased inefficiency (if inventory is not delivered on time) – reduced productivity / Less control over supply chain – increased costs / May not be suitable for large fluctuations/ unexpected changes in demand – lower sales/revenue / Requires careful coordination of production process and inventory ordering – increased training costs.
34. AO4 Evaluation (max 6 marks): Developed evaluation in context. A developed judgement/conclusion is made in the business context. Developed evaluative comments which balance some key arguments in the business context. Evaluation points: A judgement whether RCR should introduce JIT, with justification. / A judgement that RCR should continue without using JIT (or continue to use Just in Case – JIC). / What the judgement might depend upon, such as, suppliers, geography, objectives, external environment, actions of competitors, short term vs long term etc. / A discussion of the impact of technology (for example electric cars) on RCR's decision.
35. Accept all valid responses.
36. Exemplar L3: RCR should introduce JIT to avoid having to have lots of car components in stock. RCR should not introduce JIT because most customers want a speedy repairs, in 24 hours. Whether RCR should introduce JIT depends on the relationship with its suppliers because they will need regular supplies delivered to achieve its objective of increasing efficiency.