O-LevelCommerceWarehousing7100/22 · May/June 2013 · Q620 Marks

Nomel Concepts is a manufacturer of furniture. The company uses warehousing before selling the furniture online.

(a)(i)What is meant by the term warehousing?[2]
(a)(ii)Explain one reason why warehousing is important to Nomel Concepts.[2]
(a)(iii)Why would Nomel Concepts use a delivery note when despatching a consignment of furniture from the warehouse to a customer?[2]
(b)Explain two benefits to Nomel Concepts of having an Internet website.[4]
(c)A customer bought a chair from Nomel Concepts. Soon afterwards one of the legs fell off. What actions should the customer take to gain satisfaction?[4]
(d)Nomel Concepts is considering opening shops in three shopping centres to sell the furniture directly to consumers. Is this likely to benefit the business? 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.

[2] (a) (i) Any two points × 1 mark each –
storage of goods
in low cost building/shed-like building
example such as cold storage/bonded/public
+ one function of warehousing e.g. awaiting sale/awaiting transport
any other relevant point
[2] (a) (ii) Any one reason explained × 2 marks in context –
to enable Nomel Concepts to continue producing furniture instead of having to wait until completed furniture is sold
to protect the furniture from theft/damage/deterioration
to have plenty of furniture available to meet orders received online
to enable the furniture to be prepared for despatch – packed, labelled
any other relevant point
[2] (a) (iii) Any two points × 1 mark each –
to give details of the furniture sent with the delivery note
to give delivery details for the delivery person to use
so that proof/a signature can be obtained that the furniture has been delivered
so that the customer can check the furniture against the delivery note
any other relevant point
[4] (b) Any two benefits explained × 2 marks –
better corporate image and competitive edge
enables Nomel Concepts to advertise the range of furniture it has for sale and to provide detailed information about each item
enables Nomel Concepts to give its contact details such as address, telephone number and email address
enables Nomel Concepts to answer frequently answered questions or to provide an interactive service
enables Nomel Concepts to receive orders and payments on the Internet
enables Nomel Concepts to be available to its customers 24/7 and so may receive more orders from a wider area/global audience
any other relevant point
[4] (c) Any four points × 1 mark each or two well explained points × 2 marks each –
contact Nomel Concepts
give details of the chair and what has happened
give details of the order e.g. order number, invoice number
ask why the leg fell off
ask for a replacement
ask for a refund
go to another supplier
if no satisfaction is given, mention that the chair is not fit for purpose
do nothing/throw away the chair
any other relevant point
NB no marks for going to the police/suing the company/protection agencies
[6] (d) Level 2 (4-6 marks) Has discussed the benefits and drawbacks to Nomel Concepts of opening shops and has given a reasoned opinion, mentioning any additional information that might be needed to make a decision. (If a candidate has given a one sided answer, award 4 marks max.) If Nomel Concepts opens three shops, it will enable it to widen its customer base to those who do not like using the Internet or who wish to view goods before buying them. It may also attract impulse buying from those people who like to shop in shopping centres. It can also publicise the three shops on its Internet website. It will still incur delivery costs as most of the furniture is likely to be too bulky to be taken away by the customer. It may need less warehousing at the factory but warehousing will still be required to supply online orders. It may, however, be quite a risky venture. Furniture is bulky so the company will require quite large premises in each of the three shopping centres. It will have to pay a large amount of rent for premises, pay for the transport of the furniture from the factory and hire staff specialised in selling furniture. We do not know the size of this company. We do not know what financial resources it has. Nomel Concepts might do better to consider opening a factory shop at its works where it can display the furniture to customers and where the overheads are likely to be much cheaper. Level 1 (1-3 marks) Has commented on the advantages and or disadvantages of opening the three shops and has/has not mentioned any additional information required. Nomel Concepts should open the shops because it will sell more furniture. Shopping centres are very successful. Lots of people visit them. Nomel Concepts will make a lot of profit. It should still sell online.