VC is a public limited company which produces canned vegetables. VC is supplied with fresh vegetables by 20 farms. VC processes and packages the vegetables in cans. These are then sold to food retailers. VC sells over 50 varieties of canned vegetables. Each year the Board of Directors analyses sales figures and decides where each variety is on the product life cycle. The directors then base their marketing decisions on this information. VC has recently published its statement of financial position (Table 3). Table 3: Extract from VC's statement of financial position $m Non-current assets 10 Current assets 5 Current liabilities 4 Non-current liabilities 7 Equity 4 The Board of Directors of VC want to use retained earnings to pay for a new factory that can package and freeze vegetables. These frozen vegetables will be sold through the same channel of distribution as VC's current products. Market research has suggested that VC's customers want a range of frozen vegetables that are convenient for consumers to use at home. The new factory will require a manager. A job advertisement has been created (see Fig. 1). Fig. 1: Job advertisement for manager of the new factory Manager required An experienced manager is required for a new factory producing frozen vegetables. The successful applicant will have: • a good degree from a university in a business subject • the ability to motivate employees • the ability to manage inventory • finance and accounting skills.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. [2] A correct definition
2. [1] A partial, vague or unfocused definition
3. [0] No creditable content
4. [2] The money remaining in the business after it subtracts its expenses
5. [1] The money kept by a business
6. [1] Earnings set aside for a later day
7. [1] The profit made by the business
8. [0] The money that the business owner saved
9. [1] Has shareholders/can sell shares
10. [1] To the general public/through stock exchange/
11. [1] Example or some other way of showing good understanding e.g. Published accounts, LL, etc.
12. [3] Owned by shareholders with limited liability and bought through the stock exchange
13. [2] A PLC is a large company that sells shares to the public.
14. [2] Has shareholders and has limited liability
15. [2] Is owned by the government, has shareholders and had limited liability
16. [1] Has shareholders
17. [0] Owned by the government
18. [0] Is a large company
19. [2] Correct answer with or without working
20. [1] Correct use of figures/formula
21. [0] No creditable content
22. [2] $1m (with or without $)
23. [2] $5m - $4m = $1m
24. [2] 5-4=1
25. [1] $5m - $4m = $6m
26. [1] Current assets - current liabilities
27. [0] $5m + $4m = $6M
28. [0] 4/5 x 100 = 0.1
29. [0] $4m - $5M = -$1M
30. [4] Explanation of two ways to improve working capital in context
31. [3] Explanation of one way to improve working capital in context
32. [1] Identification of two ways to improve working capital
33. [1] Identification of one way to improve working capital
34. [4] Increase cash/money – retain more profit, sell fixed assets, sell shares, negotiate discounts, find cheaper suppliers etc.
35. [4] Increase debtors – only if they are new sales that would not have been cash sales
36. [4] Increase inventory – again only if this does not have a detrimental effect on cash at the same time
37. [4] Replace short term debt (overdraft and creditors for example) with long term debt – will not improve WC if it is paying debt off with cash
38. [4] Reduction of Current liabilities from $4m
39. [4] Increase in Current assets from $5m
40. [4] Increase their stock of veg/cans
41. [4] Decrease their trade receivables (debtors) from customers/food retailers
42. [4] Increase their trade payables (creditors) from suppliers of veg/cans
43. [4] Developed analysis of two method of selection in context
44. [3] Developed analysis of one method of selection in context
45. [2] Limited analysis of two or more methods of selection
46. [1] Limited analysis of one method of selection
47. [4] Shows understanding of how VC could use two or more methods of selection
48. [3] Shows understanding of how VC could use one method of selection
49. [2] Shows knowledge of two or more methods of selection
50. [1] Shows knowledge of one method of selection
51. [8] Minimises the number of applicants to be interviewed to those who identify skills
52. [8] Allows for the selection of managers who can explain problems or situations
53. [8] Can select manager with the best demonstrable skills which reduces mistakes
54. [8] Ensures that the manager isn't exaggerating the truth and can do his job
55. [7] A justified evaluation based on a developed argument of one or more uses of the Product Life Cycle in context
56. [6] A developed evaluation based on a developed argument of one or more uses of the Product Life Cycle in context
57. [5] A basic evaluation based on a developed argument of one or more uses of the Product Life Cycle in context
58. [4] Developed argument of two or more uses of the product life cycle in context
59. [3] Developed argument of one use of the product life cycle in context
60. [2] Limited analysis of two or more uses of the product life cycle
61. [1] Limited analysis of one use of the product life cycle
62. [4] Shows knowledge of the product life cycle AND marketing decisions in context
63. [3] Shows knowledge of the product life cycle OR marketing decisions in context
64. [2] Shows knowledge of the product life cycle AND marketing decisions
65. [1] Shows knowledge of the product life cycle OR marketing decisions
66. [11] The product lifecycle is very important for VC (Basic recommendation) because it means they can manage their product lines and maximise revenue (Developed recommendation) however it depends on the quality of the information gathered (Justified recommendation)
67. [11] Which could influence promotional activities and spending
68. [11] Which could minimise the product range and reduce inventory costs