Business Management SL
Operations management — Unit 5
- 1.
A factory has a maximum possible output of 1,000 units per month, but currently produces 800 units per month. (a) Calculate the factory's capacity utilization rate. (b) Suggest one way the factory could increase its capacity utilization rate without building new facilities.
[3 marks] - 2.
Marking analysis: A learner attempts the following task: “A factory has a maximum possible output of 1,000 units per month, but currently produces 800 units per month. (a) Calculate the factory's capacity utilization rate. (b) Suggest one way the factory could increase its capacity utilization rate without building new facilities.” Their response addresses only this point: “Uses the formula: capacity utilization rate = (actual output / maximum possible output) × 100.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] - 3.
Distinguish between job production, batch production, and flow (mass) production, giving one example product typically made using each method.
[3 marks] · no calculator - 4.
Marking analysis: A learner attempts the following task: “Distinguish between job production, batch production, and flow (mass) production, giving one example product typically made using each method.” Their response addresses only this point: “Defines job production as making a single, unique product to a specific customer's order, typically highly customized. Gives a valid example, such as a wedding dress or a bespoke yacht.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator - 5.
Explain the difference between quality control and quality assurance as approaches to managing product quality.
[2 marks] · no calculator - 6.
Marking analysis: A learner attempts the following task: “Explain the difference between quality control and quality assurance as approaches to managing product quality.” Their response addresses only this point: “Explains quality control as a reactive approach, typically involving inspecting finished products (often at the end of the production line) to identify and remove defective items before they reach the customer.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator - 7.
Explain how adopting Kaizen (continuous improvement) could benefit a manufacturing company over time, and state one requirement for Kaizen to succeed within an organization.
[3 marks] · no calculator - 8.
Marking analysis: A learner attempts the following task: “Explain how adopting Kaizen (continuous improvement) could benefit a manufacturing company over time, and state one requirement for Kaizen to succeed within an organization.” Their response addresses only this point: “Explains that Kaizen involves making small, incremental improvements to processes on an ongoing basis, often suggested by the employees actually performing the work.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator - 9.
Explain how a just-in-time (JIT) inventory system reduces a company's stock-holding costs, and state one risk associated with relying on JIT.
[3 marks] · no calculator - 10.
Marking analysis: A learner attempts the following task: “Explain how a just-in-time (JIT) inventory system reduces a company's stock-holding costs, and state one risk associated with relying on JIT.” Their response addresses only this point: “Explains that JIT involves ordering and receiving raw materials or components only as they are needed for production, rather than holding large buffer stocks in advance.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator - 11.
A company is deciding where to locate a new factory. Explain two factors the company should consider when making this location decision.
[2 marks] · no calculator - 12.
Marking analysis: A learner attempts the following task: “A company is deciding where to locate a new factory. Explain two factors the company should consider when making this location decision.” Their response addresses only this point: “Explains a valid factor, such as the cost and availability of labor in the area, the proximity to raw materials or suppliers (reducing transport costs), or proximity to the target market.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator - 13.
Explain how outsourcing production to a third-party supplier could reduce costs for a company, and state one risk this strategy carries regarding quality control.
[2 marks] · no calculator - 14.
Marking analysis: A learner attempts the following task: “Explain how outsourcing production to a third-party supplier could reduce costs for a company, and state one risk this strategy carries regarding quality control.” Their response addresses only this point: “Explains that outsourcing allows a company to avoid the fixed costs of owning and operating its own production facilities, and to take advantage of a specialist supplier's own economies of scale or lower labor costs.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator - 15.
Explain how effective supply chain management (coordinating with suppliers and distributors) can improve a company's competitiveness.
[2 marks] · no calculator - 16.
Marking analysis: A learner attempts the following task: “Explain how effective supply chain management (coordinating with suppliers and distributors) can improve a company's competitiveness.” Their response addresses only this point: “Explains that effective supply chain management can reduce costs by minimizing delays, waste, and excess inventory throughout the process from raw material to finished product reaching the customer.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator - 17.
Explain why a company producing a highly customized, low-volume product (such as handmade furniture) would generally choose a labor-intensive production method over a capital-intensive one.
[2 marks] · no calculator - 18.
Marking analysis: A learner attempts the following task: “Explain why a company producing a highly customized, low-volume product (such as handmade furniture) would generally choose a labor-intensive production method over a capital-intensive one.” Their response addresses only this point: “Explains that automated/capital-intensive equipment is typically only cost-effective when producing large, standardized volumes of an identical product, since the high fixed cost of the machinery needs to be spread over many units.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator - 19.
A workshop produced 4,500 units in a month using 30 workers. (a) Calculate labour productivity per worker. (b) The next month it produces 4,800 units with 30 workers. Calculate the percentage change in productivity.
[3 marks] - 20.
Marking analysis: A learner attempts the following task: “A workshop produced 4,500 units in a month using 30 workers. (a) Calculate labour productivity per worker. (b) The next month it produces 4,800 units with 30 workers. Calculate the percentage change in productivity.” Their response addresses only this point: “Calculates productivity as 4,500 / 30 = 150 units per worker.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] - 21.
Explain how a business can benefit from internal economies of scale as it increases its output.
[3 marks] · no calculator - 22.
Marking analysis: A learner attempts the following task: “Explain how a business can benefit from internal economies of scale as it increases its output.” Their response addresses only this point: “Defines economies of scale as a fall in average (unit) cost as output rises.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator - 23.
Explain how cell production (organizing workers into small teams responsible for a whole product or process) can improve efficiency and motivation.
[2 marks] · no calculator - 24.
Marking analysis: A learner attempts the following task: “Explain how cell production (organizing workers into small teams responsible for a whole product or process) can improve efficiency and motivation.” Their response addresses only this point: “Explains that team ownership of a whole task reduces handovers and waiting time, speeding up production and making problems easier to spot.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator - 25.
A firm uses 50 units of a component each day. Delivery takes 4 days and it keeps a buffer stock of 100 units. (a) Calculate the reorder level. (b) Explain the purpose of holding buffer stock.
[3 marks] - 26.
Marking analysis: A learner attempts the following task: “A firm uses 50 units of a component each day. Delivery takes 4 days and it keeps a buffer stock of 100 units. (a) Calculate the reorder level. (b) Explain the purpose of holding buffer stock.” Their response addresses only this point: “Uses reorder level = (daily usage × lead time) + buffer stock.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] - 27.
Distinguish between quality circles and total quality management (TQM) as approaches to improving quality.
[3 marks] · no calculator - 28.
Marking analysis: A learner attempts the following task: “Distinguish between quality circles and total quality management (TQM) as approaches to improving quality.” Their response addresses only this point: “States that quality circles are small voluntary groups of employees who meet regularly to identify and solve quality problems in their own area.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator - 29.
Explain two ways a manufacturing business can reduce the environmental impact of its operations.
[2 marks] · no calculator - 30.
Marking analysis: A learner attempts the following task: “Explain two ways a manufacturing business can reduce the environmental impact of its operations.” Their response addresses only this point: “Explains a valid method such as recycling waste or using recycled materials, reducing raw-material use and landfill.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator