Notes on Cambridge Assessment Business Studies Lecture

Introduction

• Focus on Cambridge Assessment February-March 2023 business studies past questions.
• Aim: Answer questions according to provided instructions.

Question 1a: Flow Production

Advantage of Flow Production

• High Output of Standard Product
  • Explanation:
    • Continuous production can lead to:
      • Increased sales
      • Higher revenue and profits
      • Advanced technology utilization
      • Economies of scale through bulk buying discounts
      • Time saved in logistics

Disadvantage of Flow Production

• Reduction in Workers' Motivation
  • Explanation:
    • Repetitive tasks can lead to:
      • Decreased efficiency
      • Potential employee turnover
• High Storage Requirements
• Production Disruption from Machinery Breakdown

Question 1b: Changes Affecting Revenue

1. Changes in Consumer Taste and Fashion

• Increased demand for products can lead to:
  • Higher revenue
  • Increased costs to meet demand

2. Increase in Consumer Income

• Higher income can result in:
  • Increased demand for products
  • Potential for increased sales revenue for RWU

3. Decrease in Competitor Prices

• Impacts include:
  • Need to lower product prices to remain competitive
  • Potential decrease in revenue due to price competition

Conclusion

• Changes in consumer taste likely have the most significant effect on revenue.
• Consumer income increases can lead to more spending.
• Decrease in competitor prices could negatively affect sales.

Question 2a: Problems of Business Growth

Problem 1: Control

• Larger businesses are harder to manage.
  • Employees may feel disconnected and less efficient.

Problem 2: Poor Communication

• Larger size can lead to miscommunication.
  • Instructions may not reach the right people, leading to errors.

Question 2b: New Factory Location Considerations

Location A: Near Existing Factory

• Advantages:
  • Easier staff transfer and training
  • Better customer access

Location B: Near Port

• Advantages:
  • Lower transportation costs for imported materials
  • Local employment benefits

Location C: Low Land Cost

• Advantages:
  • Reduced capital expenses for setup
  • Consideration of government grants and utilities

Recommendation

• Choose Location A for better communication and training efficiency.
• Location B for logistical advantages.
• Location C for cost-effectiveness.

Question 3a: Legal Controls Benefiting Employees

Legal Control 1: Protection Against Unfair Dismissal

• Ensures employment security.

Legal Control 2: Protection Against Discrimination

• Ensures equal treatment in the workplace.

Legal Control 3: Payment of Minimum Wages

• Prevents exploitation by employers.

Legal Control 4: Health and Safety Regulations

• Protects employees from workplace injuries.

Question 3b: Training Methods for New Employees

Method 1: On-the-Job Training

• Advantages:
  • Employees learn while working, reducing training costs.
  • Targeted training according to specific business needs.

Method 2: Off-the-Job Training

• Advantages:
  • Broader skill sets taught.
  • Access to the latest techniques and training methods.

Recommendation

• On-the-job training preferred for maintaining productivity during training.

Question 4: External Benefits and Costs of RwU Factory

External Benefits

1. Improved Infrastructure

• Enhances power supply and logistics in the area.

2. Job Creation

• Local employment opportunities from the new factory.

External Costs

1. Pollution

• Environmental impact from waste products.

2. Noise Pollution

• Noise from construction activities.

Final Considerations

Revenue Forecast Accuracy

• New factory likely increases output, thus revenue.
• Potential price reductions could stimulate demand.
• Higher operating costs may affect profitability.

Conclusion

• New factory might enable RWU to achieve profit targets, but revenue growth may not meet expectations.

---

• For more insights, subscribe to Yorubel Dynamics Edition.