Betty and Bobby own a factory making kitchenware for export to shops in European countries.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2011). The mark or mark type is shown in brackets.

1. [4] (a) Any two difficulties explained x 2 marks: may not be an EU member – so face trade barriers; finding a suitable market – may not know European countries very well; deciding whether or not to export directly or to use intermediaries; language - may not speak the language of the European country; distance - may mean transport and communication are more difficult; regulations/laws/customs – may be different and so goods acceptable to particular countries have to be produced, adding to costs; rates of exchange between currencies – constantly changing so may affect revenue; import regulations in particular countries – may be quotas or high import duty; currency exchange rates competition – from businesses within the EU. Any other relevant point.
2. [6] (b) Level 2 (4-6 marks) Candidate has shown how important a warehouse is to Betty and Bobby's business making kitchenware and has given a reasoned opinion. A warehouse would be very important for Betty and Bobby's business. They will need to store the kitchenware when it has been made so that they can continue with production and so that it can be displayed for potential buyers. They may need to label and pack the kitchenware before it is dispatched. They may need to pack containers ready for export. The kitchenware will need to be protected from theft and damage. A warehouse will enable them to have an adequate supply to meet orders, otherwise buyers may go to other suppliers. For all these reasons, a warehouse would be very important to them. Level 1 (1-3 marks) Candidate has given some comments on the functions of a warehouse with little or no context. A warehouse provides storage for goods. It protects goods from damage because of weather and from theft. It enables production to continue. It helps Betty and Bobby to sell their goods.
3. [2] (c) 1 mark for each method of payment and 1 mark for each reason: NB candidates should not have used the same method of payment more than once. (i) electronic transfer: designed for payments between countries, speedy transaction involving different currencies, quick computerised method of payment, use of Internet, safety.
4. [2] (ii) credit transfer/cheque: credit transfer – can be done automatically through the bank/one large payment + list of payees given to the bank/secure/paid direct into bank accounts; cheque – made out for any amount/given to employees/crossing makes it more secure.
5. [2] (iii) direct debit/cheque/credit transfer: direct debit – used for variable amount/paid at irregular intervals/computerised transaction/paid when creditor requests it/secure method of payment; credit transfer – can be done automatically through the bank/secure; cheque – may be a one-off payment/made out for any amount/crossing makes it more secure. Any other relevant point.
6. [4] (d) Any four points x 1 mark each or 2 points explained x 2 marks: check against delivery note/invoice; contact the supplier; give details of the faulty components and the invoice details; supplier should issue a credit note; credit note transaction would be shown on statement of account; balance owed would be reduced by the amount of the credit note; supplier might replace the faulty components; description of the credit note = 1 mark max; ask supplier to check other goods; return the goods. Any other relevant point.