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O-LevelBusiness StudiesOperations management7115/22 · Oct/Nov 2018 · Q120 Marks

Identify and explain two methods PP could use to improve the quality of its products.

  1. (a)Identify and explain two methods PP could use to improve the quality of its products.[8]
  2. (b)Consider the following three ways PP could reduce its costs. Recommend which way PP should choose. Justify your answer.[12]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

  1. [1] Method: Quality control identified
  2. [1] Explanation of Quality control: checked at the end/by inspectors; aims to eliminate faults before product gets to customers; less training needed as inspectors employed to check quality
  3. [2] Application mark for Quality control (contextual reference to PP/pottery production)
  4. [1] Method: Quality assurance identified
  5. [1] Explanation of Quality assurance: checked by employees throughout the production process; eliminates faults before it passes to the next stage of production; reduced costs as less need to reduce prices of faulty products; more expensive to train staff to check their own work; relies on workers being committed to maintaining a standard
  6. [2] Application mark for Quality assurance (contextual reference to PP/pottery production)
  7. [1] Method: Total Quality Management (TQM) identified
  8. [1] Explanation of TQM: continuous improvement by focusing on each stage of the production process; quality become central ethos of employees; 'right first time' means no customer complaints/reduced costs as no faults to repair or price reductions needed; expensive to train all employees; relies on all employees accepting responsibility for ensuring quality
  9. [2] Application mark for TQM (contextual reference to PP/pottery production)
  10. [1] Method: (Employees) Additional training of employees/recruit experienced workers identified
  11. [1] Explanation of (Employees) Additional training: less likely to make mistakes
  12. [2] Application mark for Employee training (contextual reference to PP/skilled production workers)
  13. [1] Method: (Raw materials) Change supplier/improved quality of raw materials identified
  14. [1] Explanation of (Raw materials) Change supplier: improved quality of final product if inputs better
  15. [2] Application mark for Raw materials (contextual reference to PP/pottery items)
  16. [1] Method: (Equipment) Introduction of automation/new technology identified
  17. [1] Explanation of (Equipment) Introduction of automation: fewer faults as products are standardised
  18. [2] Application mark for Equipment (contextual reference to PP/factory, traditional methods)
  19. [1] Reduce marketing budget by 20% (Advantage): Reduces costs spent on advertising
  20. [1] Reduce marketing budget by 20% (Advantage): Loyal customers may not need advertising to still demand PP pottery products
  21. [1] Reduce marketing budget by 20% (Advantage): Already well-established/well-known brand so less advertising needed
  22. [1] Reduce marketing budget by 20% (Disadvantage): May lead to falling sales if consumers are not persuaded to buy the pottery
  23. [1] Reduce marketing budget by 20% (Disadvantage): Competitors may be advertising and attract customers
  24. [1] Reduce marketing budget by 20% (Disadvantage): Reduced spending on market research - less likely to understand customer needs
  25. [1] Reduce marketing budget by 20% (Disadvantage): Need to research new market in country Z – expansion may be hampered
  26. [1] Increase investment in automated equipment (Advantage): Increases efficiency
  27. [1] Increase investment in automated equipment (Advantage): Lowers unit costs
  28. [1] Increase investment in automated equipment (Advantage): Improved quality - standard product so less mistakes/fewer faults
  29. [1] Increase investment in automated equipment (Advantage): Fewer workers needed leading to reduced wage cost
  30. [1] Increase investment in automated equipment (Disadvantage): High cost of initial investment may take long time to recoup the expense from lower unit costs
  31. [1] Increase investment in automated equipment (Disadvantage): Costs incurred of making workers redundant
  32. [1] Increase investment in automated equipment (Disadvantage): Increased debt
  33. [1] Increase investment in automated equipment (Disadvantage): Additional training costs
  34. [1] Change to a cheaper supplier of raw materials (Advantage): Lower cost of raw materials reduces variable costs – increase in the profit margin/lower prices
  35. [1] Change to a cheaper supplier of raw materials (Advantage): Lower cost of sales - increase profit margin
  36. [1] Change to a cheaper supplier of raw materials (Disadvantage): May lead to a lower quality pottery reducing reputation
  37. [1] Change to a cheaper supplier of raw materials (Disadvantage): May increase transport costs (although existing supplier is not local)

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About this question

Topic
Operations management, O-Level Business Studies (syllabus 7115). Structured question, 20 marks.
Source
O-Level Business Studies, Oct/Nov 2018 Paper 2 Variant 2, question 1.

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