Fig. 3 shows a price list that appeared in a trade magazine. LATIFF CASH AND CARRY WHOLESALERS Light Bulbs and Electrical Accessories Prices per 100: coloured light bulbs $50 clear light bulbs $50 plugs $80 adaptors $100 extension sockets $200 Minimum order $50 Quality Guaranteed [Figure 3] Use the information given in Fig. 3 to help you to answer the following questions.

Mark scheme

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

1. [2] because Latiff is aiming to sell to retailers
2. who are likely to use trade journals to find what is available
3. Latiff is aiming at specialist traders within a trade
4. such as electricians
5. Latiff can target its potential buyers better than when using a newspaper
6. it may be able to give more details about the goods it is selling
7. any other relevant point
8. [2] 1000 / 100 × $200 (1 mark) = $2000 (1 mark) OFR applies
9. Award full marks for the correct answer without working.
10. [6] Any two commercial documents × 1 mark each and 2 marks each for the description
11. quotation – reply to an enquiry, shows terms and prices of goods requested
12. delivery note – copy of invoice, accompanies goods supplied, signed for on delivery
13. advice note - copy of invoice, sent before the goods are despatched
14. invoice - gives details of the order including the total cost
15. statement - send at the end of trading period, showing all transactions for that trading period, request for payment
16. credit note - used when overcharge made, goods returned, reduces the amount owed
17. any other relevant document
18. [4] 2000 / 100 × $50 (1 mark) = $1000 (1 mark)
19. $1000 × 15 / 100 (1 mark) = $150 profit (1 mark)
20. OFR applies. Award full marks for a correct answer without working.
21. [6] Level 2 (4-6 marks)
22. Has discussed Latiff operating as both a cash and carry wholesaler and as a traditional wholesaler and has given a reasoned answer.
23. (If a candidate has given a one-sided answer, award 4 marks max.)
24. Wholesalers are under pressure in many countries because of large-scale retailers buying directly from suppliers. Many of the customers for wholesalers are small-scale retailers and businesses. In order to attract these customers Latiff has to offer competitive prices. This can be done by cutting some of the services offered by the traditional wholesaler such as delivery, credit and invoicing. The expenses are, therefore, lower and so Latiff can offer its customers electrical supplies at lower prices. Retailers and other business people can have easy access to the warehouse at their convenience, serve themselves and do not have to wait for deliveries. They can obtain supplies to satisfy sudden demand. They can save on storage space as Latiff will store the goods until they are required.
25. It may be that Latiff has to employ staff to stack shelves and to operate check-outs. It may have to open for longer hours than if it were operating as a traditional wholesaler. It may mean that it is selling in smaller bulk than a traditional wholesaler. It may mean that some potential buyers would not use Latiff as they cannot obtain credit but, on the other hand, Latiff does not run the risk of bad debts.
26. Latiff still performs some of the functions of the traditional wholesaler. Latiff would purchase from manufacturers, break bulk, warehouse goods and bear the risk of being left with stock.
27. On balance, it is better that Latiff operates as a cash and carry wholesaler as the business needs to attract trade customers. It may also widen its customer base by allowing other people to have membership cards.
28. Level 1 (1-3 marks)
29. Has commented on Latiff operating as a cash and carry wholesaler and/or a traditional wholesaler with/without an opinion.
30. Cash and carry wholesalers do not transport goods for their customers. Their customers pay using cash or debit cards. Latiff stores goods for customers. It displays the goods. It allows self service. Latiff should continue to operate as a cash and carry wholesaler.