Hello viewers, welcome back to Yorubel Dynamics Edition. Today we will be treating Cambridge Assessment, their past question for February-March 2023 on business studies. We have to answer all questions according to the instruction. above here. Now let's move to the question directly.
Question 1a, we have to explain one advantage and one disadvantage to ARCW of using flow production. Of course the ARCW here is the name of one company they are referring to and here we have the flow production. I believe we know what flow production is before. Now, we have to list out one advantage and one disadvantage and of course we have to give the explanation for each advantage and disadvantage mentioned. The first advantage of using flow production is high output of a standard product.
High output of a standard Let's find this out. High output of a standard or quality product. One advantage of using flow production is the high output of a standard product. Now, what is the explanation of this advantage? Of course, we might not have to type all this.
explanation out this our time but i will explain this to you in words of course when we use flow production that is continuously producing a product it can lead to potential increase in sales and possibly higher revenue and profits other advantages might also include more advanced technology that can be used can also allow purchasing economies of scale that is bulk buying which comes with discount and also time saved in moving goods around the company. Now let us speak a point also in the disadvantages of using flow production. One of the disadvantages of using flow production is also the reduction Reducing motivation for workers, that is, it reduces workers'motivation. Of course, while using flow production by a company, it might reduce the motivation for the worker. How?
Because the work can be very repetitive for the employee. which by creating less efficiency and make them leave, some might leave the company. Other disadvantages we have is the high storage requirements.
And also, if we have machine break, the production might also be altered. Now, for example here, when you are answering short questions here regarding production, as I said earlier, we have... factory products such as paints for wooden furniture manufacturers or more so you have to put an application explanation in your explanation where why you are answering the questions now let's see the next question we have here we have one b the question b says consider how the following changes the following three changes may affect Rw that is they are both companies and which changes is likely to have the most effect on their revenue and they ask you to justify your answer here to answer this question assuming we were not these things were not listed below here you have to list them out before giving your explanation or views on it now the first one here we have changed in consumer taste and fashions. How does changing consumer taste and fashion affects the company's revenue.
Of course, let's use an example of a factory product. As I said earlier, as I said, we have paint furniture. We have increased demand.
Let me type this out for better explanation. For better explanation, increase demand increase in demand demand for a produce what can actually lead to this increasing demand for a product due to changes in consumer taste and fashion of course many products might be needed to introduce to meet the changing in consumer needs, which can also lead to an increase in cost. But it can also lead to the revenue of the company because when they meet the consumer of the people, they will actually purchase more of their products.
Now let's move to the increase in......competition... in consumer income. How does this affect the FWU company?
Let us find this thing out. What consumer income does to FWU company? Of course, it may result to an increase of the paint, as I mentioned the product earlier. which can also increase the demand for the products and also at the same time increase the revenue can also lead to lower sales revenue of the products from customers now let us write the selling points out here can increase it may lead to what it may lose to an increase to an increase in sales to an increase in sales and also to an increase in the rw rw's revenue we have to reduce this to have our space here now let us drag it now it may lead to an increase in sales and also to an increase in the revenue of agw as the company now the third one is decrease in the price of the competitors Of course, the product of the person that is also selling, that is the product of the company, selling the same product as ours.
Now, how does this affect the company? Of course, decrease in the price of the computer product may lead to decrease of the product of our use. And as the less price competitive will decrease. revenue.
But we have here, they might need to also reduce their price in order to remain competitive within the market in order to remain competitive within the market. Now we have a space here for conclusion. What conclusion can you give the three changes and how did they affect the company?
We might not need to write this thing out, just listen to the explanation and put them down in your own. understanding. Of course the changes in taste and fashion are likely to have the most effect on revenue if the RWU produce what consumer actually needs and when they produce that if we increase their revenue as it says will increase and also the increase in income we also have an effect because customer will spend time they will spend time buying what they need rather than going for what they did not and the decrease in the price of the computer product you also have an effect if there is likely to be a decrease in demand for rw use products this product that i mentioned you can put your own factory products inside to get your full mark now let us move to the next question here we have question two hey here let us zoom in to see the exact equation as you can see we have two a two a question says we have to explain two possible problems of lw of the business growing that is the business we are talking about if our w's company wants to grow their business what are the likely problems that they are going to face as you can see we have to mention it and also give an explanation for it but this is our time here in order not to waste much of our time i will list them out and i will explain the explanation in words not typing it out now the problem the problem one that we have here is the control larger business larger business are more difficult are more difficult to control.
Why are larger businesses difficult to control? Why are they difficult to control? According to this problem number one.
Now we move to the explanation. Of course, when the business is growing, some employees may not feel part of the business and may not even work effectively which can also lead to an average cost or increased unit which can also lead to an average unit due to not seeing the testing in authority now what is the problem number two that we have here of course we were told to just mention and explain the two possible problem of the business growing now Here, the second one I would like to mention here is poor communication. It may lead to, it may also lead to poor communication. Now let us use this thing to fit in.
It may also lead to poor communication. Then how does this? for communication how does this affect how does this affect the rw company growing of course instruction might not even get to the right person when the company is more large and there might also be an error in worked carry out or the instruction might not even carry out correctly Of course, those are not the two problems of business growing that we have. We still have problems in financing, the expansion, poor commitment of the employee, and over-expansion, that is, expand too quickly. You might also add to that, but make sure you answer exactly what they told you to do.
Now, let us move to the next question here. The next question here we have question 2B. We have question B here. Now, using Appendix 2 and other information, that is the one we explain now business growing or establishing new business.
Consider the three possible locations for R.W.'s new factory. Which location should ArcW choose? Justify your answer.
Using this appendix 2 information is ArcW is establishing new FAC2. What possible location do you think can fit in for them? Now, for location A, I would like to choose the nearest to the existing factory.
Why? Nearest to the existing factory. How does this...
location. How is it possible? How is it possible?
How is it a possibility location for Rw? Of course, the factory will be so easier to move some existing workers across in order to train the new factory worker. And as you know, this will automatically reduce the lower cost in training the employee.
Of course, they might also They might also have it easier to access their customers and understand their preferences quicker to respond to, as there is also change in details and fashion. Now moving to location B, we still have more to that. Now moving on to location B, what type of location do you think LWU can also choose? in order to achieve the same as the existing factory of course near port near to the port let me have the test near the location should be near to the ports to the port how does this actually affect the location of tracing by it RW company.
Of course, it will reduce the cost of transporting imported material as 75% of raw material are imported which make it easily accessible from ship in the port. Choosing location near to the port can also make it available locally. as i said it will reduce the transport cost and it will also give employment in the local area which might actually lead to a lower wage rate page now what's location c should we choose now for to choose another location for the business to choose another location for the business we have to look for the cost of the land because of the land that is lower cost of land the lower cost of land is also considered when choosing the location because it will reduce the capital required to start up the factory and also at the same time In the location C, we have to consider the government's grant support, that is, their power, if there is less reliable or there is power cost. It also has to be considered why choosing the location for AgWU new photos. Now, below here, you have to give the recommendation of all the locations you just mentioned here.
You might not write this out. just listen to the recommendation and make sure you explain is to your own understanding location a to be choosing because of what it is near the existing factory as i explained above it will improve the communication from the manager or director to the employee and the location b It will also be choosing, as I said, 75% of raw material are imported to the manufacturing place. And also location C, choosing as the land and wages cost will be what? It will be low and it will be near to the main market or city. Now we move to the next question here.
We have question 3A. Version 3a says you should explain for legal control that may benefit an employee. Now, we have the space for legal control 1, 2, 4. Before you answer this type of question, you have to list out the legal control before you give the... explanation.
The first legal control I would like to mention here is protection against protection against unfair dismissal. Protection against unfair dismissal. Of course, how does this serve as a legal control?
That is, how does this serve as a legal control? it serve as a law guiding an employee of course having production against unfair destination the employee will have security of employment whenever they are working now i have legal control too i have protection against discrimination too let's type that out protection against discrimination discrimination now let's drag to the legal control too protection against discrimination means that is employment are treated equally according to the law that makes it a benefit to an employee now Moving to the legal control 3, we also have paying minimum wages according to the legal control. Let us establish also paid minimum wages.
Paid minimum wages. Legal minimum wages can also prevent strong employers exploiting. their workers now let us drag this to the letter control three now to the legal control four we also have the health and safety law that protects against the injury at work health health and safety health and safety Now, how does this health and safety laws serve as a legal control that benefits employees? Of course, the employee will not get us while doing their work.
Of course, we still have more legal control, but we were told to just mention four here. We have... redundancy payment made.
We have, as I mentioned, protection against discrimination. It can also be provided with an employment contract. Now let's move to the next question here.
The question says consider the advantages and disadvantages of two methods of training other than induction training which RWU could use. for employee in the new factory they just established now which of these two methods that we are going to mention here should iw choose you have to mention them explain them and also justify your answer one of the methods we have here is on the job training on the job Now let us write the method out. On the job, on the job, training, on the job, training. Of course, on the job training is a training that took place within a person's work environment.
how does this method be an advantage to our WU's concrete? Of course, this will ensure production of the products like furniture, paint and help them to supply them to their shop at the same time when they are still learning the training and it is also relatively cheap compared to off the job training that is the one that is far away from the work environment and also it also means specific needs of business training can be exact way the company wants the tax to be carried out since it is done within the company now we move to the method two the method two that we have is of the job training of the job training as i just explained this now the training that took place away from the work environment of the job training, off-the-job training. Now, how does this off-the-job training affect our WU company?
Of course, a broad range of skills will be taught outside the company in order to produce more quality products for the company. And it's often used as part of trainers. and also give better training to employees.
And it is also considered the most up-to-date technique because it is learned outside of the company. Now you were asked to post the recommendation here based on the method the RWU is going to choose. On-the-job training may be better to choose. Why? because it will allow workers to keep working at the same time as being trained.
Because when they are still training, they are still doing the company job, which will lead to they will produce output at the same time they are also receiving their training. While they have the job training, it may be better to choose because it will lead to higher quality training being given to the employee. because skilled job on the flow production line and the employee needs to maintain the reputation of our w might not need to add this down listening to the recommendation and fifth is your own explanation or field now we move to question four question four says we should explain two external benefits and two external costs from our w factory That is the new factory of RwU.
What are the external benefits and the external costs that you think comes out from RwU company? Of course, the first external benefit is an improved infrastructure. Improved infrastructure. infrastructure.
Now, how does this serve as an external benefit? Of course, it will help to ensure power supply within the company area if the location C that we choose above is used. And also, we also have another external benefit that is the job created.
Let's write it out. the job created job created how does this job create itself as an external benefit of course in the local area from the building of the second factory the job create created there might be an external benefit to the company that is not how we have on external But we are told to mention just two. We also have road improved by government to aid increased traffic and also tax that will be paid to the government. Now let's move to the external costs that we have for our WU companies.
External costs can include pollution that can be caused by waste products. Pollution. At the external cost, we have pollution.
Let's type this out before the explanation. Pollution. Pollution that can be caused by waste of produce. Now, another one that we have is noise from the construction of the new building. Noise from the building.
From the new factory, AgW is developing. Noise from the new... factory can also be an external cost to the company not from the new factory. Let's fix this and that is the second external cost. We also have increased roads congestion in the local area.
as also the external cost. Now let us move to the next question we have which says using appendix 3 and other information consider whether the following forecasts are likely to be accurate after the new factory has been built. This is referring us to the question 3 that is where the AGW is establishing new Now, what do you think, what opinion can you give to RW to achieve the revenue forecast of $20 million? Of course, the leverage will have increased because the new factory can increase the output of their product per year.
this can actually increase let's type it out you can actually increase their output per year in order to increase the revenue and also lead to an increase in the revenue forecast and revenue forecast increase increase in their revenue, increase in their output rather, increase in their output in order to increase the revenue. They can actually increase their output so that the revenue forecast can be met. That is just one point for them to achieve the revenue forecast. Another point is the price. They can also reduce the price of the products.
Of course, reduction in the price can actually lead to an increase in demand of a particular product and that's when the price is reduced they will automatically have an increase in sales why we have the increase in sales of course the revenue will also lead to an increase the number two here we have how you can advise them on their cost of sales of course the company can increase to six million dollar cost of sales if there is no economies of scale. And also, bulk buying discounts, if bulk buying discounts is applied, can also increase by a smaller amount than $3 million, due to purchasing economies of scale. The selling point here is bulk, bulk buying, bulk.
buying with bulk buying with discount of course if the company is buying in bulk which will also reduce their cost of sales per year now we move to the expenses for cars which include the interest paid of 12 million dollars Now, how does this affect the RWU company? Because we are likely to be higher than $12 million because there will be interest payments on the bank loan if they actually go for loan when establishing the new factory. And also higher set of costs may also rise the expenses above $12 million.
Million. Hiya! set of costs.
Higher set of costs may also increase the expenses above 12 million in the first year after the factory has been built. Now, your conclusion regarding to this your conclusion regarding to this forecasting is that your conclusion regarding to this forecasting is that materials likely to achieve a profit of two million dollar or more after the factory has been built because the new factory will enable the fw company to increase output and revenue from the sales of their products and at the same time they are not likely to achieve a profit of two million dollar after the factory has been built because they are unable they are likely to be able to double their sales in one year therefore the revenue is unlikely to increase significantly this brings us to the end of this year past question to see more of this video kindly subscribe