Bus Paper 2

Question 1

Job production

Answer 1

is when individual products are made one at a time to meet specific customer preferences.

eg.cakes,suits,dresses

Question 2

Batch production

Answer 2

Batch production involves making a set quantity of identical products.

Eg.bread rolls,bakeries,phones

Question 3

Flow production

Answer 3

Flow production involves continuously making identical products.

eg.chocolate bars,television

Question 4

Advantages of job production

Answer 4

Customisation,flexibility,higher quality

Question 5

Disadvantages of job production

Answer 5

Higher costs, slower production,high labour costs

Question 6

Advantages of batch production

Question 7

Disadvantages of batch production

Answer 7

Flexibility,cost efficient,improved quality control

Question 8

Advantages of flow production

Answer 8

Mass production,reduced cost per unit,specialisation

Question 9

Disadvantages of flow production

Answer 9

Demotivating for staff,impact on cash flow (keep stocks of raw materials)

Question 10

Economies of scale

Answer 10

The more you produce the cheaper your products are

Question 11

Technology impacts of cost

Answer 11

Technology costs money to purchase, but reduces the cost of producing products.

using machinery to complete dangerous tasks means a business no longer has to pay the higher wage costs associated with risky jobs. This both reduces costs and improves employee health.

Question 12

Technology impacts on quality

Answer 12

Businesses need to be consistent in the quality of the products they produce.

Mechanising or automating parts of production can help with this.

Question 13

Technology impacts on productivity

Answer 13

Using machinery to mechanise or
automate parts of the production process leads to an increase in productivity.

This means a business can either reduce its prices to remain competitive or increase its profit margins

Question 14

Quality control

Answer 14

The process of inspecting products and services to ensure that what customers receive is of a high standard after the product is finished

Question 15

Importance of Quality control

Answer 15

Focuses on identifying faulty goods

Identifies and fixes problems and faults

Quality is the responsibility of one individual or a specific team of individuals

Question 16

Quality management importance

Answer 16

The reputation of the business

When a business can offer higher quality and lower costs, it gains a competitive advantage over similar businesses. A good-quality product or service helps to build a strong
brand image which can allow a business to grow its market share

To gain and retain customers

Customers will have an expectation about the quality of a product, even if the price is low. If the quality of a product or service falls below the expectations of customers they will not return.

Reduce product returns and recalls

Mistakes are expensive, and
quality control and quality assurance help businesses to limit additional costs and reduce wastage by aiming to ensure that things are done correctly the first time.

Question 17

E-commerce

Answer 17

E-commerce refers to the buying and selling of products and services using devices connected to an electronic network

eg.internet

Question 18

Face-to-face

Answer 18

Sales method where a sales representative directly interacts with a customer in person

Question 19

Telesales

Answer 19

A method of selling where products or services are offered to customers over the telephone

Question 20

Advantages of E-commerce

Answer 20

The business can attract customers across the globe, potentially increasing market share

Sales can be made at any time of the day or night, increasing the likelihood of making a sale

Payments can be received immediately

Question 21

Disadvantages of E-commerce

Answer 21

More competitors from across the globe, making it harder for the business to get noticed

Employees may need new skills

Need to maintain and update technologies, including security software, which may be expensive

Question 22

Consumer law

Answer 22

Consumer Rights Act (2015)

Goods must be:
Accurately described
Fit for purpose
Of satisfactory quality

Services must:
Use reasonable care and skill
Be based on binding info
Be done in reasonable time and for a reasonable price

Returns:
Full refund within 30 days if product is faulty, unfit, or misdescribed.
Faults in first 6 months are assumed to be there from the start.

Repairs/Replacement:
After 30 days, 1 chance to repair/replace.
If that fails – refund or price reduction.

Delivery:
Within 30 days unless agreed otherwise.
Business is responsible for goods until received by the consumer.
Delays give consumers the right to cancel and get a refund.

Consumer Protection Act (1987)
Focuses on product safety.
Producers (not just sellers) are liable for damage from defective goods.
Consumers can claim against the producer for harm caused by faulty products.

Impact on Businesses:
Must comply with laws to avoid legal action.
Encourages higher product/service standards.
Helps maintain a positive reputation and customer trust.
May increase costs (e.g. better quality control, legal compliance).

Question 23

Business location (proximity to the market)

Answer 23

Advantages
Eg.takeaways, corner shops, clothes shops, pop-up food businesses and hairdressers,

being close to their market is extremely, they would miss out on sales as they would not be easily accessible to their
target market

Question 24

Proximity to labour

Answer 24

Businesses need to make sure they are located in an area that has people with skills relevant to the job role.

for roles with a low requirement for skills, a business would just need to be located near any populated area to ensure it can hire employees

any populated area to ensure it can hire employees. For roles that require a high level of skill, such as a

design engineer, computer scientist or solicitor, businesses

may need to be located close to big cities, university towns or other areas that attract more highly-skilled people.

Question 25

Proximity to materials

Answer 25

For some products, being close to the raw materials is extremely important for saving money bulk-gaining products, where the product is larger than the raw materials used to produce it (eg a bike), it makes sense for a business to be located near its market so that it doesn’t have to transport the finished product very far.

Question 26

Proximity to competitors

Answer 26

Many businesses like to be located far away from their competitors so that they have access to more customers without having to fight off competition. Eg.petrol stations, corner shops and barber shops, this works extremely well.

Question 27

Procurement

Answer 27

This is the process of sourcing, purchasing, receiving, and inspecting the goods and services a business needs to operate

Question 28

The impact of logistics and supply decisions on businesses

Answer 28

**Costs** -Fast and efficient production helps keep costs low. -Delays can increase costs and affect cash flow **e.g. damaged, lost, or unavailable goods** **Reputation** -Poor supplier quality or late deliveries can damage a business’s reputation. -A bad reputation may result from not meeting customer expectations. **Good suppliers = high-quality, reliable products = positive reputation** **Customer Satisfaction** Achieved by delivering the right products, to the right place, at the right time. **High satisfaction = more repeat customers, better sales, and increased profits.**

Question 29

The purpose of the finance function

Answer 29

-to provide the financial information that other business functions require to operate effectively and efficiently -to support business planning and decision-making

Question 30

Why businesses need finance

Answer 30

Business start-up Running costs Recruitment Marketing Expansion

Question 31

Ways of raising finance internally

Answer 31

**Owner’s Capital** Money saved by the entrepreneur. Used for start-up, expansion, or replacing equipment. No interest charges = cost-free. Only available if the owner has enough savings. Suitable for sole traders and partnerships. **Retained Profit** Profit kept in the business instead of being taken out. Used to fund growth or investment. No interest or dividends needed. Only available to profitable, established businesses. **Sale of Assets** Selling fixed assets (e.g. equipment or vehicles) to raise money. Good for funding expansion or buying new equipment. Only possible for businesses that own assets. Can be slow if a buyer isn’t found quickly.

Question 32

Ways of raising finance externally

Answer 32

**Overdrafts** * A business can spend more than it has in the bank for a short time. * Only pays charges when using the extra money. * The bank can ask for the money back quickly. --- **Trade Credit** * A business can get stock now and pay later. * Helps improve money flow as goods can be sold before paying for them. * If payment is late, the supplier may charge extra or stop supplying. --- **Loans** * Money is borrowed from the bank and paid back monthly. * The cost of borrowing stays the same each month, helping planning. * The bank might ask for something valuable as a backup in case the business can’t pay. --- **Share Issue** * A business raises money by selling parts of the company. * No need to pay the money back, even if profits are low. * Owners lose some control as more people get a say. --- **Crowdfunding** * Many people online give small amounts of money to support an idea. * A good way to check if people are interested in the business idea. * Can be hard to raise enough money without a strong or exciting idea. --- **New Partner** * A new person joins the business and puts money into it. * Brings in fresh ideas or skills that can help the business grow. * The original owners have to share both decisions and earnings.