X Trading Ltd (XTL) exports kitchen equipment worldwide. The kitchen equipment is purchased from various manufacturers nationwide and collected in its own transport.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

1. [4] Goods are better supervised (1), less theft (1) Flexible (1), no fixed timetable (1), transport available at short notice (1) Pick up times can be arranged (1) to suit XTL/the supplier (1) Saves money (1) that would have been paid to hire a vehicle (1) Advertising (1) can be done on the side of the truck (1) Can pick up from several suppliers (1) on the same journey (1), saving money / cutting down journey times (1) It is more economic (1) if there are regular loads of sufficient quantities (1) Less documentation (1) is needed when own transport used (1) Can be hired out to other firms (1) when not needed to obtain extra income (1)
2. [6] Level 2 (4-6 marks) Has discussed whether or not XTL should use containers to export the kitchen equipment and given reasoning Level 1 (1-3 marks) Has commented on the statement If a candidate has presented a one-sided argument, award 4 marks max. Containerisation speeds up the transport of goods because, once packed at XTL's warehouse, the container is not unpacked again until it reaches its final destination Trans-shipment from road to ship to road again is efficient with specialised equipment available There is less chance of theft or damage because the goods are in locked metal containers The containers do not have to be warehoused since the container acts as a warehouse whilst in transit There are drawbacks to using containers: ports have to be re-organised to accept containers and this costs money and training time for staff. Therefore, shipments to some smaller ports cannot be made using containers Whole containers are sometimes lost overboard in rough weather or by being misrouted Small amounts of goods may be uneconomical to send by container unless other goods can be found to fill the container reasonably full Using containers will usually be an economical way of exporting clothing and provides good security. The only exception would be when exporting small amounts or exporting to small ports where container handling facilities are not available
3. [1] Email Telephone Videoconference Teleconference
4. [4] Yes/importer benefits (1): bonded warehouses are used to store imported/dutiable goods (1) before the import duty has been paid/no need to pay duty straightaway (1) The importer may be looking for buyers/delay payment (1) and may remove samples (1) pay the duty on the samples (1) and obtain a sale before paying all of the duty/buyer pays the duty (1) economises working capital (1) by keeping cash flow stable (1) The importer can package the goods while they in the bonded warehouse (1), goods can be inspected by the prospective buyer (1) and then re-exported (1) without paying duty (1) No (1): the bonded warehouse will only benefit the importer if the goods attract duty (1). If the sporting equipment does not attract any import duty (1) then a bonded warehouse should not be used (1) and the goods can be stored in an ordinary warehouse (1)
5. [3] $55 × 30/100 (1) = $16.50 (1) $55 + $16.50 = $71.50 (1) or 3 marks for the correct answer
6. [2] He can sell the stock at a discount Have promotion offer/e.g. free dishwasher with kitchen He can advertise kitchens at cheaper showroom prices He can advertise special offers Donate it Telephone kitchen fitters Sell to a wholesaler Sell to a retailer Sell to other businesses