Belted Up (BU) Belted Up (BU) is a manufacturer of hand-made leather belts for clothing. The business makes a range of sizes and colours of belts using batch production. Table 2.1 shows some details of BU's best-selling belt, the Classic. The price of each Classic belt is $11. Table 2.1: Details of BU's Classic belt Size Colour Number of belts sold in 2020 (000) Small Brown 10 Medium Brown 60 Large Brown 40 Small Black 15 Medium Black 80 Large Black 60 BU has an objective of internal growth. The directors of BU have decided to manufacture a new belt that can be reversed, so that it is black on one side and brown on the other. This could affect the amount of inventory held by BU and its liquidity. The directors have proposed process innovation so that the new belt can be produced by machine. The factory manager has been promoted within the business and a new factory manager is needed. An extract from the job advertisement for this vacant position is in Fig. 2.1. Job title: Factory manager We are looking for a factory manager to drive the process innovation needed to develop the production of belts. The factory manager will manage all of the 70 production workers and 8 supervisors in the factory. The manager will also meet regularly with the worker representatives. The factory manager will also manage the inventory and be responsible for the warehouse operations. Fig. 2.1: Extract from the job advertisement for the new factory manager

Mark scheme

Marking points from the official mark scheme (May/June 2021). 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. The ability (cash) for a business to pay its short-term debts / the ease with which assets can be turned into cash (or are cash) to use immediately.
5. A correct definition should include the following elements:
6. • Assets that can be turned into cash
7. • To use immediately if needed or to pay short-term debts
8. ARA
9. Award one mark for each point of explanation:
10. Knowledge: C [1] Example or some other way of showing good understanding
11. Knowledge: B [1] Understanding of the concept of internal
12. Knowledge: A [1] Knowledge of growth
13. When a business increases in size, by reinvesting money to increase output, for example using retained profit to buy new assets. Often referred to as organic or natural growth. Could come from developing new products, increasing efficiency, successful marketing, diversification, process change etc.
14. ARA
15. [2] Correct answer with or without correct working or $
16. [1] Formula or correct calculation of the revenue for one belt
17. [0] No creditable content
18. Output = 265 000
19. Price = $11
20. Formula: Output x price = revenue (1)
21. or
22. 10 000 + 60 000 + 40 000 + 15 000 + 80 000 + 60 000 = 265 000 belts (1)
23. 265 000 × $11 = $2915000 ($2.915m)
24. Total revenue = $2.915m (2)
25. 2915 (1) (without $ and million)
26. [4] Explanation of one advantage and one disadvantage to BU of selling a range of sizes and colours for the classic belt.
27. [3] Explanation of one advantage or one disadvantage to BU of selling a range of sizes and colours for the classic belt.
28. [2] Identification of one advantage and one disadvantage of selling a range of products
29. [1] Identification of one advantage or one disadvantage of selling a range of products
30. [0] No creditable content
31. Advantages may include:
32. • To increase sales revenue – each size and colour has a relatively large number of sales
33. • To suit/attract a larger number of market segments
34. • To target a mass market
35. Disadvantages may include:
36. • High levels of inventory
37. • Increased training for workers
38. • Different levels of demand
39. Context could include:
40. • Reference to data in table 2.1
41. • Batch production
42. • Non-perishable product
43. ARA
44. [Level 2b, 4 marks] Shows understanding of two elements of process innovation in context
45. [Level 2b, 4 marks] Good analysis of two disadvantages of process innovation in context
46. [Level 2a, 3 marks] Shows understanding of one element of process innovation in context
47. [Level 2a, 3 marks] Good analysis of one disadvantage of process innovation in context
48. [Level 1b, 2 marks] Shows knowledge of two elements of process innovation
49. [Level 1b, 2 marks] Limited analysis of two disadvantages of process innovation
50. [Level 1a, 1 mark] Shows knowledge of one element of process innovation
51. [Level 1a, 1 mark] Limited analysis of one disadvantage of process innovation
52. [0] No creditable content
53. Knowledge may include:
54. • Putting a new approach into action
55. • About adding value
56. • Improving/developing existing goods, services or processes
57. • Need to understand customer needs
58. • Developing imaginative solutions
59. • Can be expensive
60. Analysis may include:
61. • May require retraining of the 70 workers in the factory – additional costs for BU
62. • Will require the purchase of machinery for mass production – does BU have the finance available?
63. • May lose their reputation of being hand-made
64. • Could lead to redundancy of the 70 factory workers
65. • No guarantee that the new belt will be successful, so the investment in the new process may be wasted
66. ARA
67. [Level 7 marks] Justified evaluation based on argument in context
68. [Level 6 marks] Developed evaluation based on argument in context
69. [Level 5 marks] An evaluative statement based on argument in context
70. [Level 3-4 marks] Shows understanding of Mintzberg's management roles in context
71. [Level 3-4 marks] Argument based on the usefulness of Mintzberg's management roles in context
72. [Level 1-2 marks] Shows knowledge of Mintzberg's management roles
73. [Level 1-2 marks] Limited analysis of the use of Mintzberg's management roles
74. [0] No creditable content
75. Knowledge may include: Interpersonal roles
76. • Figurehead
77. • Leader
78. • Liaison
79. Informational roles
80. • Monitor
81. • Disseminator
82. • Spokesperson
83. Decisional roles
84. • Entrepreneur
85. • Disturbance Handler
86. • Resource Allocator
87. • Negotiator
88. Application and Analysis may include Mintzberg's roles are useful because:
89. • Figurehead - Factory manager must inspire the 70 workers and 8 supervisors
90. • Leader - Factory manager must lead the 70 workers and 8 supervisors
91. • Liaison – To meet regularly with the worker representatives
92. • Monitor - New process for the mass-produced belts and the inventory in the warehouse
93. • Disseminator – 70 workers and supervisors – need to get information to them quickly and efficiently, especially with the new process
94. • Spokesperson – May need to represent the company to other stakeholders
95. • Entrepreneur – may need to innovate the processes of production further
96. • Disturbance Handler – New process may lead to conflict with the 70 workers, 8 supervisors and worker representatives.
97. • Resource Allocator – Inventory management of the warehouse
98. • Negotiator - May need to negotiate with customers (businesses) as well as the workforce
99. Evaluation may include:
100. • Manager has authority and status so interpersonal skills necessary to earn respect
101. • Managers have to communicate to various stakeholders so important to have informational ability
102. • Managers have to make decisions, adapt to situations, allocate resources
103. • Managers ensure operations run efficiently
104. BU can use this in recruitment, job description and interviews to ensure it employs someone who will have the correct impact on the business
105. ARA