Identify and explain four factors that affect how much stock of fruit and vegetables Manuel's shop should have.

Mark scheme

Marking points from the official mark scheme (May/June 2014). The mark or mark type is shown in brackets.

1. Content:
2. • Demand from customers
3. • How perishable is the stock
4. • Storage space in the shop
5. • Delivery charges
6. • Seasons/celebrations
7. • Amount of money
8. 1 mark for each factor identified plus 1 explanation mark for each factor.
9. 1 knowledge mark + 1 explanation mark (2 marks × 4 factors)
10. Reason: How perishable is the stock (1 knowledge mark)
11. Explanation: How perishable is the stock (1) because if the fruit and vegetables do not last very long before they go off then stock will be replaced often to ensure it is fresh (1 explanation mark).
12. Content (for part b):
13. Open own shops – can keep all the profits; more control over the operations; large amount of capital required; may need to take on partners or shareholders.
14. Selling franchises – capital injection from selling the franchise plus share of the profits; still have control over shop image; expand more quickly; get business name more widely known; rapid expansion may be difficult for him to control; success of the business will now depend on the skill of the franchisees (could improve or damage reputation).
15. Level 1 – 1 mark for each statement. E.g. Manuel will gain a capital injection from selling the franchise plus he will receive a share of the profits made by the shops (1 mark).
16. Level 2 – 5 marks for the first level 2 answer and then one extra mark for each additional level 2 answer up to maximum of 8 marks. E.g. Manuel will gain a capital injection from selling the franchise plus he will receive a share of the profits made by the shops. He will still have control over the shop image as the franchisee will have to keep the shop in the same colours as Manuel's shop, sell the stock supplied by Manuel, etc., as this will be part of the franchise agreement. 5 marks for level 2 answer.
17. Level 3 - Detailed discussion of at least two level 2 answers and then a recommendation at the end which justifies which is the best option to choose compared to the other option.
18. Possible application marks: sole trader; located on main road; reference to financial information from Appendix 1; country X; capital city.
19. There may be other examples in context which have not been included here.
20. Application (Level 3): 9-10 marks At least 2 x Level 2 + well justified recommendation as to whether to sell a franchise compared to opening his own shops.
21. Application (Level 2): 5-8 marks Good discussion of advantages/disadvantages of selling a franchise and opening his own shops OR balanced argument. Some limited judgement shown in recommendation about whether to sell a franchise or open his own shops.
22. Application (Level 1): 1-4 marks Outline of advantages/disadvantages of selling a franchise and opening his own shops.