A manufacturer based in a city in the centre of a country is selling a large consignment of furniture to a retailer located in a town 450 kilometres from the manufacturer.

Mark scheme

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

1. [4] (a) Any two commercial documents × 1 mark each + their use × 1 mark each – quotation - in response to an enquiry, when a request is made for prices; advice note - when the goods have been despatched; delivery note – to accompany the goods sent to the retailer; invoice - to give the retailer details of the furniture sent and the total bill; credit note - when the retailer has been overcharged/returned damaged furniture; statement - to show the total amount owed for a series of transactions; receipt - sent to prove that payment has been made; any other relevant document
2. [4] (b) (i) Any two risks described × 2 marks each – public liability – to cover third party claims because of faulty furniture; employer's liability – to cover claims made by employees because of the manufacturer's negligence; product liability – to cover claims because of faulty furniture; fire – to cover destruction of factory because of fire; buildings - to cover manufacturer's premises against fire, theft, flood; fidelity bond – to cover fraud by an employee; consequential loss – to cover loss of profits resulting from the business not being able to function; motor/vehicle – to cover the manufacturer's vehicles – comprehensive/third party; theft - to cover stolen goods/money; key person - to cover the life of a person important to the business; any other relevant business risk
3. [2] (b) (ii) Any two documents × 1 mark each – prospectus, proposal form, policy, cover note
4. [6] (c) Level 2 (4-6 marks) Has discussed each of the three methods of transport available and has given a reasoned recommendation. (If a candidate has given a reasoned recommendation without discussing the other two means of transport, award 4 marks max.) The manufacturer wishes to move the large consignment of furniture 450 km. I would recommend using road transport. The manufacturer may have his own transport and so there should be a saving in transport costs. The distance is not too far. The furniture can be loaded at the factory and delivered directly to the retailer's premises. The furniture would be under the supervision of the driver for the journey and so would be less likely to be stolen or damaged. If there was too much furniture for one load, perhaps two trucks could be used or the same vehicle could make two journeys. I would not use air transport because it is a large consignment and the furniture is likely to be too heavy. I would not use railway unless the furniture was sent in a container. Goods train is not suitable as the furniture might be damaged. Railway is slow and there would need to be some form of road transport to and from the railway yard. Level 1 (1-3 marks) Has commented on the most suitable method of transport to move the consignment of furniture. I would use rail. The furniture is a bulk cargo. It could go in a container. It would be cheap. I would not use road transport as it is slow for long journeys.
5. [4] (d) Any four points × 1 mark each or two well explained points × 2 marks each – the manufacturer would need to use a fast means of communication; the manufacturer could telephone the retailer to explain the reasons for the delay; to discuss arrangements for the delivery and give details of when the retailer might expect the consignment; using the telephone would be more personal and the manufacturer could apologise; the manufacturer could email the retailer (giving reasons and details) thus providing a written record of the message and back-up to the telephone call; email might be useful if the manufacturer cannot contact the retailer by phone or if it is after opening hours; any other relevant point