Delicious Cocoa (DC) DC is a co-operative owned by cocoa farmers in country X. It has 500 workers. In 2022, DC produced 2000 tonnes of raw cocoa beans. Productivity is expected to increase by 5% in 2023. Although DC is profitable, it has no retained earnings. DC focuses on the triple bottom line as its main objective. The members of the co-operative (farmers) are motivated within the current operation. Zara, the Managing Director, has recently completed a workforce plan. She has identified that young people do not want to work on DC's farms. Their concerns are: • lack of investment in training • most of the work is manual • lack of control over earnings. Ranjit, the Operations Director, has identified an opportunity to create added value by investing in a capital intensive factory. The factory will process raw cocoa beans produced by DC's farms into cocoa butter. Cocoa butter is a premium product and attracts higher profit margins than raw cocoa beans. The processing factory will require a significant capital investment ([Table 2.1]). Table 2.1 Data for the cocoa processing factory $ Initial investment: Land | 100 000 Machinery | 150 000 Training | 15 000 Average variable costs per tonne | 5000 Average selling price per tonne | 10000

Mark scheme

Marking points from the official mark scheme (May/June 2023). The mark or mark type is shown in brackets.

1. [1] Identification of an element may include: Economic (financial); Social; Environmental; People; Planet; Profit. Accept all valid responses.
2. [1] Knowledge of added value (e.g., difference between cost of purchased inputs and selling price of finished goods).
3. [2] Developed application of added value (e.g., to production costs, enterprise value, unique features, service, examples of added value).
4. [1] Limited application of added value.
5. [1] Formula: total output in a given time period / Total workers employed
6. [1] Calculation of 2023 output (2000 × 1.05 = 2100) OR use of correct figures in formula (2100/500).
7. [1] Correct answer: 4.2 (tonnes per farmer) (no tonnes needed for final mark if correct). OFR applies.
8. [1] Knowledge of a reason why labour productivity is important (e.g., to keep costs down, to keep revenue/profits up).
9. [2] Developed application of one relevant point to DC (e.g., DC is a co-op, 500 workers, 5% productivity increase expected, profitable, no retained earnings, triple bottom line objective, lack of investment, manual work, lack of control concerns, capital-intensive factory investment, Table 2.1 data).
10. [1] Limited application of one relevant point to DC.
11. [1] Knowledge of motivation (internal/external factors stimulating desire).
12. [2] Knowledge of two motivational factors (e.g., employee input, personal enrichment, goal setting, celebrating achievements, positive workplace, training/promotion, financial benefits, motivational theorists).
13. [2] Developed application of two factors to DC (e.g., creation of jobs off farms, $15000 training investment, skilled jobs replacing manual work, alternative payment methods for control over earnings, capital-intensive factory).
14. [1] Limited application of one factor to DC.
15. [3-4] Developed analysis (identifies connections between causes, impacts, consequences) of two points.
16. [1-2] Limited analysis of one or two points.
17. [1] Knowledge of capital/labour-intensive operations OR growth of operations.
18. [2] Knowledge of capital/labour-intensive operations AND growth of operations (e.g., benefits/limitations, efficiency, productivity, profitability, breakeven, objectives, transformation).
19. [2] Developed application of growth of operations to DC (e.g., reputation, 500 farming families, community benefit, 5% productivity increase, $265000 investment appetite, no retained earnings, farmers' ability to operate machinery, 100% profit margins).
20. [1] Limited application of growth of operations to DC.
21. [2] Developed analysis (identifies connections between causes, impacts, consequences) of arguments for AND against.
22. [1] Limited analysis of arguments for OR against.
23. [5-6] Developed evaluation in context (developed judgement/conclusion, balanced evaluative comments, considers priorities/finances, future demand, triple bottom line impact, importance of earnings, raw material supply, recommendation).
24. [3-4] Developed evaluation (developed judgement/conclusion, balanced evaluative comments).
25. [1-2] Limited evaluation (judgement/conclusion, attempt to balance).