Jane owns a small shop selling food. She is located on the outskirts of a large town. There is a supermarket 3km from her shop. Fig. 2 shows one of the products she sells. [Figure 2] Use Fig. 2 to help you answer the following questions.

Mark scheme

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

1. [1] Poppy Peas
2. [1] $14.40 / 24 = $0.60 – cost of each can
3. [1] $0.60 × 30% = $0.18 – amount of mark-up
4. [1] $0.60 + 0.18 = $0.78 – final price
5. [1] To enable the price to be shown
6. [1] To give details / information of the product / name
7. [1] To give code number of the product
8. [1] Shows expiry date of product
9. [1] To enable a receipt to be printed
10. [1] To enable the stock levels to be adjusted / stock management
11. [1] To automatically order new stock
12. [1] To identify popular selling lines
13. [1] The service is friendly
14. [1] with the customer feeling welcomed into the store
15. [1] Customers know Jane
16. [1] trust her
17. [1] listen to her personal advice/recommendations
18. [1] May offer informal credit / lay-bye goods for customers
19. [1] creating customer loyalty
20. [1] so they will continue to shop there
21. [1] Jane will know her customer's wants
22. [1] and will stock accordingly
23. [1] Jane will listen to customer complaints
24. [1] in order to improve her business
25. [1] Might be more convenient
26. [1] nearer to their homes
27. [1] to suit people's needs
28. [1] Might offer delivery
29. [1] for a large shop
30. [1] Longer opening hours
31. [1] so that consumers can obtain goods earlier/later than at supermarket.
32. [1] Consumers are often in an unfair bargaining position
33. [1] with the large firms that they are buying from
34. [1] Consumers suffer from a lack of knowledge
35. [1] of technical products
36. [1] Safeguards consumers / stop them from being exploited / being cheated
37. [1] so that they are treated fairly
38. [1] Safeguard against fake/spurious goods
39. [1] hard to distinguish whether a good is genuine or not
40. [1] Consumer laws gives rights
41. [1] if the product is not fit for purpose / faulty goods
42. [1] Consumers need protection from advertisements/promotions
43. [1] which give misleading information
44. [1] Protection against unhealthy products
45. [1] such as warnings on cigarette packets
46. [1] Consumers need protection from underweight goods
47. [1] dishonest traders using faulty scales
48. [1] Consumers need protection from groups of companies (cartels)
49. [1] that may conspire to keep prices artificially high.
50. [1] Supermarket can order in bulk and request delivery to the regional distribution centre
51. [1] thus taking advantage of bulk purchase and reducing delivery costs from the manufacturer.
52. [1] Delivery to individual branches can be based on what they need, and many different products can be sent in one shipment.
53. [1] Head office will have closer control over stock levels.
54. [1] Buffer stocks can be kept at the regional distribution centre in case branches run out.
55. [1] The regional distribution centre will be expensive to set up as new premises will have to be found.
56. [1] New staff will have to be employed for the centre.
57. [1] A fleet of trucks will have to be purchased or leased in order to transport the goods from the centre to the individual supermarkets.
58. [1] Buying staff at the individual branches will no longer be needed.
59. [1] Head office will have more control over the branches and this will make the whole operation more efficient.
60. [1] If the extra expenditure results in an overall lower cost operation, then the regional distribution centres can be justified. However, there will be some extra up-front expenditure and the chain must have the cash flow available to meet this.