O-LevelCommerceProduction7100/22 · May/June 2016 · Q820 Marks

Shufla Footwear is a shoe manufacturer. It employs 30 production workers. Workers specialise in different tasks, for example, cutting, shaping or stitching the shoes.

(a)(i)Using an example from Shufla, state what is meant by specialisation.[2]
(a)(ii)Explain one advantage and one disadvantage to Shufla's production workers of specialisation.[4]
(b)Shufla sells 60% of its output through mail order. Explain two benefits to Shufla of selling its shoes through mail order.[4]
(c)Shufla is facing competition from cheaper imports. Explain two actions Shufla might take to remain competitive.[4]
(d)The issue of consumer protection has been discussed at a meeting of senior managers at Shufla. Discuss whether or not senior managers at Shufla should consider protection of the consumer to be important. Give reasons for your opinion.[6]

Mark scheme

Marking points from the official mark scheme (May/June 2016). The mark or mark type is shown in brackets.

[2] 8 (a) (i) Up to 2 marks for a definition and one mark for example from question stem
Specialisation is concentrating on one task or process or similar phrase (1) e.g. cutting/shaping/stitching (1)
Accept any other relevant point
[4] (ii) Up to 2 marks for explaining an advantage and up to 2 marks for explaining a disadvantage to the workers (not the business)
Advantages:
Worker becomes more skilled (1) by doing the same job repeatedly (1)
Using machinery (1) may reduce manual effort (1)
Jobs take a shorter time to learn (1) so training for a new job is easier (1)
Disadvantages:
Doing the same job (1) may lead to boredom (1)
Fewer skills (1) to transfer to other jobs/can lead to unemployment (1)
Less job satisfaction (1) as only responsible for part of job (1)
Accept any other relevant point
[4] (b) 1 mark for each benefit stated and 1 further mark for each explanation
Selling through mail order means a much wider market (1) which will increase sales (1)
Costs are usually less (1) than establishing shops/eg rents (1)
More efficient courier services (1) has meant safer deliveries (1)
Accept any other relevant point
[4] (c) One mark for each action stated and 1 further mark for each explanation
Shufla may have to reduce prices (1) to remain competitive if profitability is to be maintained they will have to reduce costs/likely to lead to higher sales (1)
Shufla may have to increase advertising (1) to attract customers/allow an example (1)
Shufla may use sales promotions (1) in order to maintain sales/allow an example (1)
Shufla may lobby government to impose import duties or import quotas on foreign goods (1) thus increasing the cost of foreign goods (1)
Shufla may improve quality of shoes (1) attracting new buyers (1)
Free delivery may be provided (1) as an after-sales service
Could provide credit (1) attracting customers who would like to delay payment (1)
Accept any other relevant point
[6] (d) Level 2 (4-6 marks) Has discussed whether or not Shufla should consider consumer protection as important to his business and given reasoning (If a candidate has presented a one-sided argument on home trade, award 4 marks max.)
Level 1 (1-3 marks) Has commented on the statement
Consumer protection is a means of ensuring consumers obtain a fair deal and that the products are safe.
Shufla must ensure the customers receive value by manufacturing a quality shoe at a fair price.
Advertising and promotions must not be misleading.
Many aspects of consumer protection are written in law and Shufla must ensure that no laws are broken.
Consumer protection can increase costs
If Shufla's managers do not consider consumer protection important, then Shufla's reputation will be damaged and this will eventually lead to a decrease in sales revenue.
Accept any other relevant point