Refer to Table 1. Calculate for 2019 the:

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [1] (a)(i) Capacity utilization = No. of rooms occupied x 100/total no. of rooms % (1 mark if no relevant calculation)
2. [1] (a)(i) 1300 + 1000 + 1600 = 3900
3. [1] (a)(i) 1600 + 1400 + 2000 = 5000
4. [2] (a)(i) = 3900 × 100/5000 = 78%
5. [2] (a)(i) Allow 78
6. [1] (a)(ii) Variance = difference between budgeted and actual data (1 mark if no relevant calculation)
7. [1] (a)(ii) Forecast revenue = 1800 × 40 = $72000
8. [1] (a)(ii) Actual revenue = 1600 × 40 = $64 000
9. [4] (a)(ii) 64 000-72 000 = –$8000 or $8000 Adverse
10. [3] (a)(ii) -8000 or 8000 or $8000
11. [2] (a)(ii) Total Variance = –$34 000 as candidate has correctly calculated basic hotels budgeted and actual.
12. Knowledge (b): Definition of profits
13. Knowledge (b): Explanation of lean production – cutting waste, meeting customers' expectations, inventory control, trained employees, flexible systems, TQM, Kaizen
14. Application (b): 78% capacity utilisation in hotels
15. Application (b): Lean production in hotels e.g. inventory, holding of towels, food etc.
16. Application (b): Inflexible workforce – only trained in one role
17. Application (b): Lack of empowerment – tasks detailed and how long they should take
18. Application (b): Lack of response by Head Office to letters
19. Application (b): Limited ability to change Head Office instructions
20. Analysis (b): Increasing profits requires lower costs and/or increased sales revenue, LP increases efficiency and therefore reduces unit costs
21. Analysis (b): Increasing capacity utilisation may increase revenue potentially resulting in higher profits
22. Analysis (b): Costs can be lowered by cutting inventory holding costs (lower levels consumables and food), more JIT, better information flows, more flexible systems with less rigid control
23. Analysis (b): Addressing quality assurance by using TQM would increase employee training and flexibility and could therefore reduce complaints leading to fewer poor reviews and more bookings
24. Analysis (b): Valuing staff comments and empowering them can lead to significant improvements and more bookings. Kaizen could be introduced to encourage this.
25. Analysis (b): Training to give employees a range of skills so that flexible working can be adopted
26. Analysis (b): Linking demand via bookings to staff and resource provision could cut costs and improve efficiency
27. Analysis (b): Introducing zero hour contracts would reduce costs by increasing flexible response to demand
28. Evaluation (b): Changes incur costs which might be bigger than rise in profits
29. Evaluation (b): Changes require a change in management approach and systems – will Jolin be able to do this?
30. Evaluation (b): Importance of lean production compared to e.g. marketing or external economic and market conditions
31. Evaluation (b): TQM must be integrated into lean production