Refer to Table 3 and lines 54–56. Calculate for 2020 the:

Mark scheme

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

1. [2] Productivity = output / employees (1 mark if no relevant calculation)
2. [2] 5100 / 80 (1)
3. [2] 63.75 (units) (2) Accept 63.8 OR 64
4. [2] Allow 63.7 (2)
5. [2] If candidate subtracts 153 from output (faulty goods produced), then productivity = 61.8 (2)
6. [3] Monthly cost = faulty output × cost of repair (1 mark if no relevant calculation)
7. [3] 5100 × 0.03 = 153 (1)
8. [3] 153 × 70 (2)
9. [3] = $10 710 (3)
10. [3] Alternative working: 5100 × 70 = 357 000 (1)
11. [3] 357 000 × 0.03 (2)
12. [3] = $10 710
13. [3] OFR
14. [Level 2 Knowledge 2 marks] 2 marks Two relevant points including knowledge of TQM
15. [Level 2 Application 2 marks] 2 marks Two points applied
16. [Level 2 Analysis 4 marks] 3-4 marks Good use of theory and/or reasoned argument
17. [Level 2 Evaluation 4 marks] 3-4 marks Good judgement shown, e.g. well supported conclusion
18. [Knowledge] Quality relates to whether a product meets customer expectations.
19. [Knowledge] Quality control uses quality inspectors at end of production to identify faulty output.
20. [Knowledge] Quality assurance is a system of agreeing and meeting quality standards at each stage of production to ensure customer satisfaction.
21. [Knowledge] TQM is an approach to quality that aims to involve all employees in quality improvements. TQM includes: quality chains, quality circles, zero defects, concept of internal customers and kaizen.
22. [Application] Linking points to TQM.
23. [Application] Removes need for quality control inspectors.
24. [Application] Cost savings from reduced rework of faulty goods. $10710 (OFR) is current monthly cost of substandard output requiring rework.
25. [Application] AC workers are skilled.
26. [Application] Other factors causing problems. Current employee concerns over lack of empowerment.
27. [Application] Other factors causing problems. Pay currently 90% of industry average – workers do not feel valued.
28. [Application] Other factors causing problems. Labour turnover is 15%.
29. [Application] Other factors causing problems. Production stopped due to supply chain issue.
30. [Analysis] Quality chains and internal customers will reduce rejects as next stage employees will be unwilling to accept substandard items.
31. [Analysis] TQM makes explicit the need for quality assurance throughout the process so decreases likelihood of poor work.
32. [Analysis] Greater responsibility for workers may increase motivation, thus reducing labour turnover.
33. [Analysis] Not all employees will embrace having greater responsibility and may be demotivated, leading to other production problems.
34. [Analysis] Employees may demand higher wages due to increased responsibility which will increase costs.
35. [Analysis] Cost of implementing such a significant change will have a negative impact on AC's cash flow and profit in the short term.
36. [Evaluation] Decision on whether TQM is likely to succeed with supporting business reasoning.
37. [Evaluation] Justification of most important factor affecting this decision.
38. [Evaluation] Elements that the evaluation/judgement might depend on: Change to TQM incurs costs, especially of training, which in short term may offset any quality improvement.
39. [Evaluation] Elements that the evaluation/judgement might depend on: Operations Manager may not have the skills necessary to get employees on board.
40. [Evaluation] Elements that the evaluation/judgement might depend on: TQM can only succeed if training is given to all employees.
41. [Evaluation] Elements that the evaluation/judgement might depend on: Other possibilities exist to reduce production problems, e.g. paying a bonus for achieving target wastage rates. These may be more appropriate for AC and cheaper.
42. [Evaluation] Significant change in culture so may be difficult to implement.
43. [Evaluation] Other factors causing the poor performance in the factory.
44. [Evaluation] In the short term, implementation may make things worse as adjustments are made. In the long term, it should improve quality.
45. [Evaluation] Other approaches may be necessary to deal with labour turnover and problems, e.g. pay.