TM is a private limited company in the primary sector. Tin is found underground and is extracted by mining. TM operates seven mines in country C. There are several job roles at each mine including skilled engineers, managers and miners. TM has recently discovered a new source of tin in a remote area of country C. TM has permission to develop a tin mine but will have to construct transport links. It will need new buildings such as offices, warehouses and employee housing. The Human Resources Director is developing a workforce plan to recruit miners and managers for the new mine. TM's Financial Director has produced a cash flow forecast for the new mine for the next five years. This is shown in Table 2.1. [Table 2.1] The remote area of country C where the new tin mine will be located has a high level of unemployment and average incomes are low. TM intends to recruit employees from the local area and buy resources from local suppliers, if they are available. The market for tin is likely to be affected by increased demand for electric vehicles. The batteries in electric vehicles contain tin. The government of country C believes that the tin mine will be of great benefit to both the local community and national economy. However, tin mining can result in pollution of local water supplies.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

1. [1] (a)(i) B Provide to secondary / manufacturing business / first stage of production / example
2. [1] (a)(i) A Extraction or collection of natural resources / raw materials
3. [0] (a)(i) No creditable content
4. [Indicative content] (a)(i) A01 Knowledge and understanding Industry involved in extraction/collection – of natural resources (e.g. farming, mining, etc.). First part of the supply chain/provide to secondary/ manufacturing process.
5. [Indicative content] (a)(i) A correct definition should include: Extraction of natural resources/raw materials; First sector/stage of production
6. [2] (a)(i) Exemplar Extraction of natural resources (A), e.g. tin mining (B)
7. [1] (a)(ii) C Example or some other way of showing good understanding, e.g. sum total of buyers and sellers interact to exchange goods and services for a price/the interaction between price, demand and supply in an area/region
8. [1] (a)(ii) B Buyers and sellers interact
9. [1] (a)(ii) A (Place) where goods/services are sold
10. [Indicative content] (a)(ii) A01 Knowledge and understanding Consumers who want a product/service / the demand for a product/service (1) from different types/groups/segments of consumers (1) who are willing/able to pay for it (1) in the area or region considered.
11. [Indicative content] (a)(ii) The term 'market' has a number of different meanings. Any legitimate definition can be used.
12. [Indicative content] (a)(ii) The most common definition (as a means of trade) is likely to include: A system/place/facility whereby products are bought (1) and sold (1); Where businesses and consumers (1) trade (1)
13. [Indicative content] (a)(ii) However, other definitions may include: Market as a group of potential customers for a product: The customers/consumers (1) who may potentially purchase a product (1); The businesses (1) which are competing to sell a product (1); The group of people (1) to whom the business is trying to sell (1)
14. [Indicative content] (a)(ii) AO2 Application Application of a market to a business, such as: an example of a market; the interaction of supply and demand in a market; an example of the agents in a market; area/region, e.g. could be local, national, international, virtual, physical; sum/total of all buyers and sellers/consumers/producers; market can exist without agents meeting
15. [3] (a)(ii) Exemplar Where consumers buy goods and services and businesses sell goods and services (A+B). Markets tend to be in specific groups, e.g. McDonalds sell in the fast food market (C)
16. [2] (b)(i) Correct answer, with or without working
17. [1] (b)(i) Attempt/correct approach/method
18. [0] (b)(i) No creditable content
19. [Content] (b)(i) X + 0 - 60 - 0 = -80; X = -80 + 60; Opening balance = –$20m accept -20
20. [2] (b)(i) Exemplar (20) Correct answer – $ or million not needed
21. [2] (b)(ii) Correct answer, with or without working
22. [1] (b)(ii) Attempt/identifies correct figures/correct method
23. [0] (b)(ii) No creditable content
24. [Content] (b)(ii) 5 + Y - 0 - 15 = 240 (1); Y = 240 - 5 + 15; Y = 240 + 10 (1); Sales = $250m accept 250
25. [2] (b)(ii) Exemplar 250 Correct answer – $ or million not needed
26. [1] (c) Level 1(APP) Explanation of one use of a cash flow forecast in context
27. [1] (c) Level 1(K) Identifies one use of a cash flow forecast
28. [0] (c) No creditable content
29. [Indicative content] (c) A01 Knowledge and understanding Uses of a cash flow forecast: identifies potential cash shortfalls – if a business runs out of cash and is able to obtain new finance, it will become insolvent; to measure the financial performance of the business; makes sure the business can pay debts/bills; identifies potential problems with customer payments; allows better management of a business's cash; to give information to other stakeholders, e.g. banks; to identify potential shortfalls in cash balances in advance – 'early warning system'
30. [Indicative content] (c) A cashflow forecast does not forecast profit/loss.
31. [Indicative content] (c) AO2 Application Application to QF, including: expansion; use of numbers from Table 1.1; opening of new mine; answer to 1(b)(i) (OFR)
32. [Example] (c) Identification of a way (K - 1 mark) Helps in future planning; Application (APP – 1 mark) as in 2023, where a negative balance indicates cash flow issues so managers can seek a source of finance
33. [Example] (c) Identification of a way (K - 1 mark) May be used to get a bank loan; Application (APP – 1 mark) as TM will have $240m cash in 2024, the bank will be willing to lend to TM
34. [4] (d) Level 2b Shows understanding of two methods of recruitment in context
35. [3] (d) Level 2a Shows understanding of one method of recruitment, in context
36. [2] (d) Level 1b Shows knowledge of two methods of recruitment
37. [1] (d) Level 1a Shows knowledge of one method of recruitment
38. [0] (d) No creditable content
39. [4] (d) Marks Good analysis of two methods of recruitment of new mine employees
40. [3] (d) Marks Good analysis of one method of recruitment of new mine employees
41. [2] (d) Marks Limited analysis of two methods of recruitment
42. [1] (d) Marks Limited analysis of one method of recruitment
43. [Indicative content] (d) A01 Knowledge and understanding Knowledge of methods of recruitment, including: employment agencies; online recruitment; internal; external; job advertising, e.g. newspaper, flyers, etc.; recruitment events
44. [Indicative content] (d) AO2 Application Seven mines in country C. Different types of employees required such as miners, construction, managers, etc. New mine will be in a remote area. High local unemployment. Average incomes are low. Locals may be unhappy with development.
45. [Indicative content] (d) AO3 Analysis Employment agencies – reduces hiring time, may cost less although can be expensive, culture may not fit, may have a pool of potential recruits, communication difficulties, quantity v quality. Online recruitment – larger potential pool, quick, cheap, flexible, reduces paper files, informal, lots of competition as hope to recruit from local community where incomes low may miss some potential applicants. Internal – move from one of existing mines, already trained, know culture, known to management but may not want to move to remote location and will still mean vacancies in mines left. External - from local community, pool of unemployed but may lack required skills/need more training adding to costs.
46. [Example] (d) K External recruitment; APP from country C since people have low income and high unemployment; AN easier to recruit and train; DEV this will increase the reputation of TM as they are getting most of their employees from the local area. However, this could take a long time
47. [Example] (d) K Internal recruitment; APP from within the other seven mines in country C; AN easier to recruit as they will be known to the company; DEV they will already be skilled and will not need much training. However, this will lead to vacancies in those other mines
48. [Example] (d) K Recruitment agency; APP pick the people with the right mining skills for the job; AN can advertise to a greater number; DEV training costs will be lower and will lead to efficient and effective mining before it runs out
49. [Example] (d) K Advertising vacancies; APP in a mining magazine; AN where highly skilled engineers or miners will see it; DEV however, this might not be possible in the local area where low incomes and high unemployment means local people will not see the advert
50. [7] (e) A justified judgement based on a developed analysis of two or more possible conflicts between stakeholder aims of TM
51. [6] (e) A developed judgement based on a developed analysis of two or more possible conflicts between stakeholder aims of TM
52. [5] (e) A basic judgement based on a developed argument of at least one possible conflict between stakeholder aims of TM
53. [4] (e) Shows understanding of two stakeholder aims, in context
54. [3] (e) Shows understanding of one of stakeholder aims, in context
55. [2] (e) Shows knowledge of two stakeholders' aims
56. [1] (e) Shows knowledge of one stakeholder's aim
57. [4] (e) Developed analysis of two or more possible conflicts between stakeholder aims
58. [3] (e) Developed analysis of one possible conflict between stakeholder aims
59. [2] (e) Limited analysis of two possible conflicts between stakeholder aims
60. [1] (e) Limited analysis of one possible conflict between stakeholder aims
61. [Indicative content] (e) A01 Knowledge and understanding Knowledge of the aims of stakeholders, including: local community – nice place to live/work, clean environment; managers - high pay, status, perks; employees - high pay, holidays, security; suppliers - security, sales, profit; customers - low prices, quality product, good service; owners - profit, dividends; government - welfare, tax revenue, economic growth, low unemployment
62. [Indicative content] (e) Note: Aims may be implied rather than explicitly state that it is an aim.
63. [Indicative content] (e) AO2 Application Application of stakeholder aims to TM: local community, e.g. environmental impact, pollution of water supplies, employment/unemployment, living standards; employees/recruits, e.g. training, skilled work, higher incomes; manufacturers of electric vehicles / batteries / mining equipment, etc.
64. [Indicative content] (e) Note: Take reference to TM if using as a proxy for owners.
65. [Indicative content] (e) AO3 Analysis Analysis of conflicts between stakeholder aims may include: government and local community – higher employment/tax revenue so likely to give planning permission, whilst community concerned about pollution of water, buildings in local area or longer term impact when mine closes; employees and owners – employees want higher payments, job security, permanent contracts – all increase costs and conflict with owner's aims to maximise profits/keep costs low; suppliers and owners – both aim to maximise profits so owners want low priced supplies whilst suppliers would like higher prices
66. [Indicative content] (e) AO4 Evaluation A judgement may consider the importance of conflict, the potential impact of conflict, whether some stakeholders are more important than others and the need to prioritise stakeholders' interests and conflicts. A judgement over the relative effects on TM of the stakeholder conflicts. Elements that the judgement could depend upon, including how this may vary over time and in relation to different specific business decisions.
67. [Example] (e) K Shareholders want to obtain high profits (K), local community aims for a clean environment (K); APP TM is a private limited company; AN they want to exploit as much as they can from the ground to obtain higher profits, but this conflicts with the local community's aim for a clean environment; DEV exploitation of minerals from the ground will pollute the local water supplies, damaging the environment for future generations. But reducing the pollution will reduce the profits, so increasing the conflict between the two aims; EVAL The conflict of the aim for increasing output would highly conflict with the aim of the community (eval) since the mining of tin comes with negative externalities. This will also increase the conflict with the shareholders' aim of high profits (eval of two conflicts) as they may face fines or be required to clean up the pollution or face being shut down (justified judgement of two conflicts)