TBX manufactures high-quality steel which is used to build railways. The method of production used allows TBX to benefit from economies of scale. The business holds a high level of inventory including iron ore. The Managing Director knows business activity could have an impact on the environment and is considering ways the business can contribute to sustainable development.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2023). The mark or mark type is shown in brackets.

1. [2] Award 1 mark per way (max 2).
2. Points might include:
3. Pollution (or examples e.g. noise, air)/global warming/emission of greenhouse gases
4. Congestion/transport of goods
5. Energy use/use fossil fuels
6. Land use/use up natural resources/deforestation
7. Waste (disposal)/use single use/non-renewable/non-recyclable materials
8. Other appropriate responses should be credited.
9. [2] Award 1 mark per way (max 2).
10. Points might include:
11. Reduce amount/number of resources used
12. Reduce number of products made/level of output
13. Reduce waste
14. Reuse products/materials
15. Recycle products/materials
16. Use renewable energy
17. Develop environmentally friendly products
18. Use environmentally friendly production methods/sustainable materials
19. Use environmentally friendly/sustainable packaging
20. Replant trees
21. Use electric vehicles
22. Other appropriate responses should be credited.
23. [4] Award 1 mark for each relevant economy of scale (max 2).
24. Award 1 mark for each relevant reference to this business (max 2).
25. Points might include:
26. Purchasing (economy) for the iron ore
27. Technical (economy) to manufacture steel
28. Managerial (economy) helping contribute to sustainable development
29. Financial (economy) so can have a high level of inventory
30. Marketing (economy)
31. Other appropriate responses should be credited.
32. [6] Award 1 mark for each relevant problem (max 2).
33. Award 1 mark for each relevant reference to this business (max 2).
34. Award 1 mark for each relevant explanation (max 2).
35. Points might include:
36. Rent/storage space/large space needed for the steel which can increase fixed costs/expenses
37. Ties up working capital such as iron ore which could lead to liquidity/cash flow problems/difficult to pay suppliers
38. Insurance costs which increase cash outflows so less funds to contribute to sustainable development
39. Opportunity cost/funds could be used for other purposes
40. Risk of damage/theft/wastage/product could rust leading to higher costs
41. Other appropriate responses should be credited.
42. [6] Award up to 2 marks for identification of relevant points.
43. Award up to 2 marks for relevant development of points.
44. Award up to 2 marks for a justified decision as to whether quality control is the best way for a manufacturing business to use to achieve quality production.
45. Points might include:
46. Quality control (QC):
47. Tries to eliminate/lower chance of faults before products reaches customer to help maintain reputation
48. Does not stop production while checking so some output is available
49. Need to recruit inspectors which increases labour costs
50. Spots errors at end/does not show where error happened in process which could increase wastage
51. Other method is:
52. Quality assurance (QA)
53. Errors stopped before happen/spotted earlier in process/products checked throughout so less funds/time spent on rework
54. Increase employee motivation leading to higher output
55. Need to train all employees which increases (fixed) costs
56. Not all workers interested/able to spot problems
57. Other appropriate responses should be credited.
58. Justification might include:
59. With quality control, production workers do not need extra training so no increase in costs. Another method is quality assurance which means mistakes are spotted sooner in the process. Quality assurance is the best way because fewer mistakes is likely to mean fewer resources are wasted and the funds saved should hopefully cover the additional cost of training.