Business

1. 1.

   Distinguish quality control from quality assurance in a food-processing business.

   [2 marks] · no calculator

   Answer explanation

   Draft walkthroughs are based on marking guidance, not independently verified derivations.

   1. Inspecting a completed batch is control; standardising hygiene steps and training staff before errors occur is assurance. A firm can use both rather than treating them as mutually exclusive.

   Marking points

   • Quality control checks output against standards and identifies defects.
   • Quality assurance builds procedures into production to prevent defects.

   Examiner tip: Separate detecting defects from preventing them.

2. 2.

   Fictional case: a workshop makes 3600 units in a month against a maximum monthly capacity of 4500. Calculate capacity utilisation and unused capacity.

   [2 marks]

   Answer explanation

   Draft walkthroughs are based on marking guidance, not independently verified derivations.

   1. Compare actual output with the maximum for the same period. Spare capacity is a quantity; the utilisation percentage describes how much of potential output is currently used.

   Marking points

   • Utilisation = 3600/4500 * 100 = 80%.
   • Unused capacity = 4500 - 3600 = 900 units per month.

   Examiner tip: Use matching time periods for actual and maximum output.

3. 3.

   Fictional case: average usage is 40 parts daily, delivery lead time is 5 days, and safety stock is 60 parts. Using reorder level = lead-time usage + safety stock, calculate the reorder level. Explain what happens if delivery takes 7 days and usage is unchanged, assuming no other stock arrivals.

   [4 marks]

   Answer explanation

   Draft walkthroughs are based on marking guidance, not independently verified derivations.

   1. The buffer covers extra usage beyond the planned five-day wait. Two extra days consume 80 parts, greater than the buffer of 60, so the original reorder rule cannot fully protect operations.

   Marking points

   • Normal lead-time usage = 40 * 5 = 200 parts.
   • Reorder level = 200 + 60 = 260 parts.
   • Seven-day usage = 280 parts, exceeding available reorder stock by 20.
   • The safety stock is insufficient for that delay, creating stockout risk.

   Examiner tip: Safety stock is added once, not multiplied by lead time.

4. 4.

   Fictional case: a factory reduces batch size and reorganises machinery into cells. Analyse possible effects on inventory, flexibility and implementation costs.

   [4 marks] · no calculator

   Answer explanation

   Draft walkthroughs are based on marking guidance, not independently verified derivations.

   1. Lean changes remove waiting and handling only if the process supports them. Frequent setup or poor staff preparation can offset the reduction in inventory and movement.

   Marking points

   • Smaller batches can reduce work-in-progress inventory.
   • Cells can shorten movement and improve response to varied orders.
   • More frequent changeovers can consume time if setup is slow.
   • Relocation and multiskilling require investment and training.

   Examiner tip: Explain a process mechanism rather than assuming 'lean' always cuts costs.

5. 5.

   Fictional case: a hospital supplier considers just-in-time stock for sterile equipment, but its sole overseas supplier has unreliable delivery. Evaluate the change.

   [4 marks] · no calculator

   Answer explanation

   Draft walkthroughs are based on marking guidance, not independently verified derivations.

   1. The value of inventory includes avoiding interruption, not just its accounting cost. Retaining safety stocks for critical items while improving supply reliability may be preferable to full just-in-time adoption.

   Marking points

   • Indicative: lower stocks reduce storage costs and tied-up working capital.
   • Unreliable delivery makes interruption likely without buffers.
   • Sterile equipment shortages can impose severe customer and reputational consequences.
   • A justified recommendation considers critical-item buffers and supplier diversification.

   Examiner tip: Link buffer choice to the consequences of a stockout.

6. 6.

   Fictional case: a furniture firm proposes automation for standard chairs while custom orders are growing. Evaluate automating the entire production line.

   [4 marks] · no calculator

   Answer explanation

   Draft walkthroughs are based on marking guidance, not independently verified derivations.

   1. Automating repetitive standard stages may make sense while retaining skilled custom work. The entire-line proposal needs evidence that its flexibility matches future orders and that volume will cover fixed costs.

   Marking points

   • Indicative: automation can improve consistency and lower variable labour cost at sufficient volume.
   • High fixed investment increases risk when standard-product demand is uncertain.
   • Custom orders may need adaptable craftsmanship or flexible technology.
   • A justified judgement compares partial automation with full automation using product mix and utilisation.

   Examiner tip: Treat product variety as a constraint on the chosen technology.

Original, unofficial practice questions from SubjectScout — not official past-paper questions.