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O-LevelCommerceProduction7100/22 · May/June 2013 · Q120 Marks

Silin Styles makes sports clothing, such as tracksuits, for both the home market and export markets.

  1. (a)(i)Give two reasons why Silin Styles uses division of labour in its factory.[2]
  2. (a)(ii)State two ways in which value is added when making a tracksuit.[2]
  3. (b)Explain why Silin Styles might prefer to sell its sportswear in the home market rather than in export markets.[6]
  4. (c)Silin Styles has been selling the sports clothing to large-scale retailers and through wholesalers. The company has now decided to sell only through wholesalers. Explain two possible reasons for this decision.[4]
  5. (d)'Commercial services are necessary for the sports clothing to reach the consumer.' Do you agree with this statement? Give reasons for your answer.[6]

Mark scheme

Marking points from the official mark scheme (May/June 2013). The mark or mark type is shown in brackets.

  1. [2] (a) (i) Any two reasons × 1 mark each –
  2. so that it can use mass production methods
  3. so that workers become skilled at one part of the process/efficiency
  4. so that output is increased
  5. so that standardised products can be produced
  6. so that mechanisation/technology can be used
  7. so that a uniform quality may be achieved
  8. to save costs
  9. to save time
  10. to save moving people around
  11. any other relevant reason
  12. [2] (a) (ii) Any two ways × 1 mark each –
  13. cutting out the cloth
  14. stitching it together
  15. inserting elastic
  16. inserting zippers
  17. adding trim
  18. adding any buttons
  19. adding maker's label
  20. using good quality cloth
  21. waterproofing
  22. adding more pockets
  23. adding hood
  24. putting designs on tracksuits
  25. any other relevant way
  26. [6] (b) Any six points × 1 mark each or three well developed points × 2 marks each –
  27. shorter distances are likely to be involved so savings on transport
  28. payments in the same currency would be easier and the methods of payment simpler
  29. documentation is likely to be less complicated
  30. no need for customs clearance and for storage in bonded warehouses
  31. fewer trading restrictions such as quotas
  32. able to sell in smaller quantities and make changes to orders more easily
  33. may be able to communicate more easily with the buyer who might visit the factory
  34. more familiar with the customs/tastes of the home market
  35. there is no language barrier
  36. any other relevant point
  37. [4] (c) Any two reasons explained × 2 marks –
  38. wholesalers deal in larger bulk
  39. by using the wholesalers, the tracksuits may end up being sold through many different outlets in all kinds of shops e.g. small-scale retailers
  40. the large-scale retailers may have been too demanding in terms of price and what they required of the product/wholesalers offer better prices
  41. purchasing by the wholesalers means that production lines are cleared and then wholesaler provides the warehousing for the tracksuits
  42. they may not have produced enough to satisfy the demands of both large-scale retailers and of wholesalers
  43. they may have decided that it would be more profitable to sell abroad than to sell to large-scale retailers
  44. wholesalers provide transport so easier distribution
  45. reducing costs such as administration
  46. any other relevant point
  47. [6] (d) Level 2 (4-6 marks) Has discussed some of the commercial services (minimum of two) in relation to the sports clothing and has shown whether or not they are necessary for the sports clothing to reach the consumer. Commercial services are aids to trade such as communication, banking, transport, advertising, warehousing and insurance. Silin Styles manufactures the sports clothing and in order for these goods to reach the consumer, commercial services are needed. In order for the clothing to reach the consumer, transport is needed. Transport will be used to bring the sports clothing to the shops where it is on display. Many consumers will use transport such as cars to reach the shops. Communication with potential customers is also essential. Many consumers may buy online. If they require further information, they will contact the retailer before making a decision about their purchases. The sports clothing may need to be stored awaiting sale or transport. It will need to be stored so that it is available when the consumer requires it. Finance relating to the purchase of sports clothing is unlikely to be required by the consumer but payments may be organised through banks or payment made using credit cards. The clothing may be insured by the retailer so that in the event of loss, compensation will be paid. This would not be essential for the transaction between the retailer and the consumer to take place. But in order for the clothing to be made known to buyers, advertising must be used to inform and persuade potential customers. It can, therefore, be seen that some of the commercial services are very necessary if the sports clothing is to reach the consumer. Other commercial services help the trade between the retailer and the consumer to take place but are not essential. Level 1 (1-3 marks) Has commented on some commercial services in relation to the sports clothing. Goods are made in manufacturing industry. So that goods are sold, commercial services are needed. Manufacturers will advertise their goods. Goods will be transported. Goods will be stored before they are sold. Commercial services are needed.

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About this question

Topic
Production, O-Level Commerce (syllabus 7100). Structured question, 20 marks.
Source
O-Level Commerce, May/June 2013 Paper 2 Variant 2, question 1.

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