Exam questions Flashcards
How may seasonal patterns of demand affect the operational decisions of a business?
- Could affect operations in many ways e.g. capacity utilisation, or number of staff on the production line at different levels during peaks and lows in the year.
- Could impact on the level of inventory that a business would need to produce and hold during these periods.
The Blake Mouton grid uses the term ‘Country Club Manager’ or ‘Accommodating Manager’ for a particular style of management and leadership.
- Explain whether this style of management is likely to be suitable for a business that is looking to increase productivity.
- Manager will show a high concern for people
- Manager will show a low concern for production, so output may not grow.
- Employee morale/satisfaction is likely to be high– motivated staff are more likely to achieve targets .
- Employees are likely to have independence / autonomy.
- Objectives such as increasing productivity may not be achieved if employees are given insufficient direction.
Explain how debt factoring might benefit a retailer that offers long-term credit to its customers?
Possible answers?
- Debt factoring provides an immediate injection of cash flow in situations where goods have been sold on credit.
- The retailer will have cash and so will be able to replenish its inventory/stock
- The factoring company takes responsibility for collecting the money.
- Risk has been passed to the factoring company, to some extent.
What are the benefits of having a flexible workforce-
Made up of full time, part time, volunteers & seasonal staff?
Matching supply & demand = best use of resources.
volunteers = committed & valuable experience with no extra cost.
How much of a motivator is money for employees in businesses in general?
Whatwould you include in this question?
Relevant theorists- Maslow, seen as basic need.
Herzberg- hygiene factor.
Why may some businesses want less suppliers- especially if operating in a niche market?
Having more suppliers & growing may reduce reliability- if have been having problems.
Nature of niche market depends on reliability & quality.
Choosing fewer suppliers- help gain better relationships & could help to eliminate errors.
Why is profit important for businesses?
A return on investment
A reward for taking risks.
A key source of finance.
A measure of success.
A motivating factor & incentive.
How much do you think money is a motivator for businesses in general?
Theory X- money is form of motivation. Employees dont enjoy work & become dissatisfied. Businesses where staff is easily replacable & jobs unskilled.
Malsows hierachy- money is basic security need.
Hertzberg- 2 factor theory, money is a hygiene factor. Other factors such as enrichment, empowerment, enlargement are more motivating.
Businesses which have more democratic management- give autonomy to employees, innovative industries, more skilled, have more experience and responsibility- money wouldnt be motivating factor. To an extent it would - joy of work = higher.
A factory has just experienced a zero level of inventory. It wishes to have a buffer level of inventory of 80 units. It uses 35 units per day and has a lead time of 5 days with its supplier.
Its re-order level is:
A 80 units. B 95 units. C 175 units. D 255 units.
D 255 units.
The data below shows the weekly output and costs of a single-product firm -Calculate the weekly output of the firm in units. (4 marker)
- Total costs = £80 000
- Profit = £20 000
- Labour costs = 42% of turnover
- Labour costs per unit = 84 pence
- Labour productivity = 25 units per employee
Revenue = £80,000 + £20,000 = £100,000
Labour costs = 0.42 x £100,000 = £42,000
Labour cost per unit = £0.84
weekly output = £42,000 / £0.84 = 50,000 units
In 2007, a business had sales of £10 million in a market with a size of £125 million.
In 2017 the business’s sales were £12.6 million and its market share was 6%.
- Calculate the percentage growth in the size of the market between 2007 and 2017
Market size (2017) = £12.6m / 0.06 = £210m
market growth = (210 - 125) / 125 x 100 = 68%
𝑀𝑎𝑟𝑘𝑒𝑡 𝑔𝑟𝑜𝑤𝑡ℎ (%) = 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑚𝑎𝑟𝑘𝑒𝑡 𝑖𝑛 2017 − 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑚𝑎𝑟𝑘𝑒𝑡 𝑖𝑛 2007 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑚𝑎𝑟𝑘𝑒𝑡 𝑖𝑛 2007 × 100
The table below shows the changes in the average annual labour turnover rates for BBB plc and its competitors. Analyse how the changes in these data over time might have affected the ability of BBB plc to provide higher-quality products than its competitors.
Table shows average labour turnover for competitors is higher than for BBB plc.
- An experienced workforce, likely to maintain consistent levels of quality as everyone understands their role.
- Low labour turnover = new ideas not coming into the business & methods of production may be less suited to customers’ changing views of quality than its competitors.
- Lack of new idea may limit the scope for new, innovative & high quality products.
- Low labour turnover can reduce recruitment costs & thus reduce unit costs, providing more resources for other activities such as quality improvement.
Analyse how introducing intrapreneurship can improve the financial performance of a business?
- Intrapreneurship encourages greater creativity &innovation
- Gives more independence to members of the workforce.
- Provides an environment within which risk-taking can be encouraged.
These factors lead to:
- Potential for greater new product development with financial advantages from reaching new consumers and adding more value.
- Greater chance of successful innovation because of the resources available to support innovation leading to higher revenues.
- Greater productivity and thus lower costs because the employees involved are more prepared to give time and effort to new ideas
Analyse how delayering might affect the level of profit of a business?
- Leads to a wider span of control. Might motivate a manager who perceives their role as having greater status, leading to greater effort and output.
- Will increase the workload of managers and thus reduce their efficiency; consequently leading to higher costs or lower revenue.
- Wider span of control may worsen communication which can lead to mistakes and poorer (less efficient) customer service.
- Removing layers of management may give greater autonomy (a motivating factor) to subordinates; thus improving efficiency.
- Vertical communication may improve with fewer layers and so workers may make quicker decisions and satisfy customer needs more promptly.
