GKK makes plastic bottles for a range of products from food to chemicals. GKK buys its raw materials from a low-cost country. GKK's organisational structure is wide with a short chain of command which allows for delegation. The Government plans to introduce new legal controls to protect the environment. The Operations manager said: 'The Government might achieve one of its objectives but how does it affect GKK? This is a competitive market so prices are important.' He wants to improve efficiency and plans to use lean production.

Mark scheme

Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.

1. [2] Clear understanding: structure within an organisation through which orders are passed from senior management to the lower levels
2. [1] Some understanding: 'shows who gives orders'
3. [1] Lower unemployment
4. [1] Economic growth OR increase GDP OR improve standards of living
5. [1] Low inflation
6. [1] Improve balance of payments
7. [1] Increase output OR quicker production [k] of plastic bottles [app]
8. [1] Lower average costs [k] so can keep prices low [app]
9. [1] Fewer workers needed [k]
10. [1] Better able to compete [k] in this competitive market [app]
11. [1] Less waste [k] need for less raw materials [app]
12. [1] Fewer errors [k]
13. [1] Change OR stop using certain materials [k] moving away from plastic [app] changing production [an]
14. [1] Increase cost [k] because they may have to pay more fines [an]
15. [1] May need to change supplier [k] so stop using the low cost country [app] increasing variable costs [an]
16. [1] Reduced demand [k] as customers look for alternative ways to package food [app] so lose revenue [an]
17. [1] May have to change location [k] as not allowed to operate in certain places [an]
18. [1] Just in Time inventory control [k] which would help reduce storage costs [an]
19. [1] Kaizen /continuous improvement [k] by using delegation [app]
20. [1] Cell production [k]