paper 1 revision

Question 1

reasons why shop in good location

Answer 1

near potential target market
proximity far from competitors
busy area
parking
close to utilities
near to other services

Question 2

wholesaler nearby

Answer 2

+ can build relationships
+ variety = revenue
+ breaks bulk
+ quicker access

Question 3

supplier overseas

Answer 3

+ cheaper as no third party
+ economies of scale
- more paperwork
- can’t check quality

Question 4

advantages of batch production

Answer 4

flexible to meet changes in demand
variety of products = more sales
some variety in workers' jobs
economies of scale = reduces unit costs
less effect on production if machine breaks down
spreads risk on multiple product

Question 5

disadvantages of batch production

Answer 5

time lost switching machines between batches
one fault affects entire batch = waste
inventory sitting between stages
storing semi-finished goods = increases costs
repetitive work = demotivating

Question 6

responses to increased competition

Answer 6

new products
advertise / promotions
lower prices
merge / takeover
keep costs low
improving quality
good customer service

Question 7

effects of high interest rates

Answer 7

higher costs
reduced demands
workers may demand pay rise
have to increase prices
less expansion

Question 8

importance of product quality

Answer 8

maintain customer loyalty
ensures sales
no need to replace faulty goods
can charge high prices
legal requirements

Question 9

effects of high labor turnover rate

Answer 9

additional training costs
additional recruitment costs
reduction in output
greater workload / lower motivation
hard to maintain quality

Question 10

measuring size of business

Answer 10

value of sales / revenue
market share
number of employees
value of capital employed

Question 11

reasons for increasing taxes

Answer 11

generate revenue
influence level of imports and exports
reduce inflation

Question 12

factors when deciding which shops to close

Answer 12

number of shops in area
level of demand
rents

Question 13

improving cash flow

Answer 13

ask debtors to pay quicker
delay purchases
short term loan

Question 14

benefits of being ethical

Answer 14

higher revenue
improved brand image
investors more likely to invest
improves employee motivation

Question 15

improving internal communication

Answer 15

email - can look back at but may not instantly read

phone calls - feedback but may not have phone

Question 16

importance of break-even

Answer 16

margin of safety
effect of costs or prices
expected level of profit at levels of output
helps planning

Question 17

problems of expansion

Answer 17

access to finance
need to recruit more workers
cash flow problems
communication problems
competition
legal controls

Question 18

reasons for increased competition

Answer 18

globalisation
more businesses enter the market
developments in technology 
lower trade barriers
improvement of transport

Question 19

effects of higher taxation

Answer 19

reduced demands
delayed expansion plans
higher costs
may need to increase prices
may have to relocate / stop selling some products

Question 20

advantages of changing organisational structure (delayering)

Answer 20

improved communications
lower labour costs
senior managers less remote
increased delegation
quicker decision making

Question 21

advantages of part time employees

Answer 21

lower labour costs
wider range of skills
flexible working hours

Question 22

piece rate

Answer 22

produce more
impact on quality
discourages team work
difficult to calculate individual pay

Question 23

hourly wage rate

Answer 23

helps budget effectively
focus on quality
doesn’t encourage increased output

Question 24

disadvantages of being a private limited company

Answer 24

can’t sell shares to the public
legal formalities
have to publish some financial accounts
shareholders expect dividends`

Question 25

selling in other countries (+)

Answer 25

access to more markets spreads risk economies of scale greater brand awareness

Question 26

disadvantages of business growth

Answer 26

difficult to control communication problems slower decision making lower motivation

Question 27

improving communication between managers and workers

Answer 27

appropriate language short channel of communication suitable medium

Question 28

competitive pricing

Answer 28

no loss in market share resources to find competitor prices need another way to attract customers

Question 29

lower price

Answer 29

attract customers may think its lower quality revenue will increase (app)

Question 30

promotion methods

Answer 30

``` advertise short term price discounts loyalty schemes sponsorship demonstrations ```

Question 31

ways pressure groups influence actions of business

Answer 31

``` negative publicity boycotting protests legal actions petition ```

Question 32

objectives if in private sector

Answer 32

maximize profits increase market share increase revenue don't find protecting jobs important

Question 33

importance of revenue

Answer 33

day to day expenses generate profit measure size / success earn a loan

Question 34

problems of wide range of products

Answer 34

lack expertise increased warehouse space competitors obsolescence

Question 35

finance for inventories

Answer 35

ask suppliers for trade credit overdraft cash reserves

Question 36

importance to managers of financial accounts for decision making

Answer 36

financial performance over time compare with competitors decide on source of finance investment decisions

Question 37

features of a loan

Answer 37

``` repaid interest long time to repay (app) security / liability large amounts ```

Question 38

features of profits

Answer 38

no need to repay | less amount to be borrowed

Question 39

importance of training

Answer 39

motivator less mistakes less complaints fewer accidents

Question 40

responding to pressure groups for littering

Answer 40

``` reduce amount of paper/material used recycling facilities use recycled material buy supplies in smaller amounts hire someone to clean rubbish ```

Question 41

fixed costs

Answer 41

``` rent utilities insurance salaries loan repayments storage costs ```

Question 42

barriers of communication

Answer 42

medium problems - wrong one, technical issues sender problems - wrong or detailed info receiver problems - not listening feedback problems - no feedback

Question 43

retaining workers

Answer 43

cheaper recruitment employees know how business works improves motivation brand image

Question 44

new workers

Answer 44

new ideas training difficult to find suitable employee may bring bad habits

Question 45

qualities of a new manager

Answer 45

``` good leader organised good communicator friendly knowledgeable patience responsible motivator ```

Question 46

factors that affect accuracy of market research

Answer 46

wrong sample size info out of date dishonest opinions poorly written questions

Question 47

benefits of improving efficiency

Answer 47

``` reduces average costs less mistakes less waste fewer workers needed higher output competitive advantage ```

Question 48

effects of globalisation

Answer 48

``` more exports cheaper labour easier to relocate build brand image increased competition loss of employees ```

Question 49

overdraft

Answer 49

immediately available repayable within 12 months interest

Question 50

shorter credit terms

Answer 50

improves cash inflow | may reduce demand