paper two practice questions

• Explain one reason why a business might use performance reviews with its employees.

  Managers will discuss whether the employees have met their targets (1). As a result, the employee is more likely t be focused on their job (1). This, the employee is more likely to be productive (1).
• Explain one impact on a business of using flow production.

  The business will be able to automate the production line (1). As a result, the productivity of the business may rise (1). Therefore, the unit cost of making each item should fall (1).
• Explain one disadvantage to a business of using loan capital as a source of finance.

  Interest will have to be paid on the loan (1). Therefore, the fixed costs of the business will increase (1). As a result, the profit of the business may fall (1).
• Explain one reason why a business may decide to reduce the size of its workforce.

  New technology may mean that an employee can be replaced by a machine (1). This is because machine can produce items much after than an employee (1). As a result, the productivity of the business may increase by reducing the workforce (1).
• Explain one disadvantage to a business of having a poor relationship with its suppliers.

  Deliveries of raw materials may be late (1). Therefore, production may be disrupted (1). Thus, the business may not be able to meet the needs of its customers (1).
• Explain one impact on a business of introducing job rotation.

  Employee motivation may increase (1). This is because job rotation makes their work more interesting (1). Therefore, the business may expect an increase in productivity (1).
• Explain one benefit to a business of allowing its employees to work flexible hours.

  This may make the business a more desirable place to work (1) because workers will now be able to fit work in around other commitments such as childcare (1). Therefore, the business may be able to attract better quality employees (1).
• Explain one disadvantage of using just in time (JIT) system of stock control.

  The business will not be able to buy in bulk (1) because JIT results in frequent, smaller orders being placed for raw materials (1). Therefore, the average variable cost for raw materials could be high (1).
• Explain one advantage to a business having motivated employees.

  Employees will enjoy working in the business (1). Therefore, they may be less likely to leave the business (1). As a result, the business will not have to incur the costs of recruiting new staff (1).
• Explain one impact on a business if tariffs are placed on its exports.

  This may make the product more expensive in the foreign market (1). Therefore, demand for the product abroad could decrease (1). Therefore, the business may experience falling sales revenue (1).
• Explain one method that a business could use to reduce its environmental impact.

  It could reduce the amount of packaging used. Therefore, less resources such as plastic are used (1). As a result, preserving non-renewable resources such as oil (1).
• Explain one method that a business could use to extend the life cycle of one of its products.

  The business could reduce the price (1). Therefore, the product now appears better value for money than rival products (1). Thus, sales of the product should start to rise (1).
• Explain one impact that a pressure group can have on a business.

  Pressure groups may damage the brand image of the business (1). Therefore, potential customers may switch to ethical brands (1). As a result, the sales of the business may fall.
• Explain one disadvantage to a business of having poor customer service.

  Customers may become dissatisfied with the business (1). As a result, they may not make any repeat purchases (1). Therefore, the market share of the business may fall (1).
• Explain one reason why aesthetics may be important in the design mix of a product.

  This may make the product look more attractive (1). Therefore, customers may choose the product over those of a rival (1). As a result, market share may increase (1).
• Explain one drawback to a business introducing a system of quality assurance.

  This may involve a large amount of employee training (1). This is because workers at each stage of the production process are now responsible for checking their own work (1). Therefore, business costs may increase (1).
• Explain one reason why having a post-sales service may be important to a business.

  This allows customers to resolve any problems they may have with the product (1). Therefore, customer loyalty should increase (1). Thus, the business should gain repeat purchases (1).
• Explain one impact on a business from reducing the size of its workforce.

  The labour costs of the business may fall (1). This is because the business will not have to pay as many wages/salaries to workers (1). Thus, the break-even point of the business will fall (1).
• Explain one benefit to a business of using external recruitment to employ new staff.

  Employees from outside the business will bring new ideas to the business (1). Therefore, the workforce may become more productive (1). As a result, the average total cost of producing products may fall (1).
• Explain one impact on a business from a lack of communication.

  Employees will be unsure of what they have to do (1). As a result, they may start to make mistakes (1). Therefore, the quality of the good or service may fall (1).
• Explain one need it to a business of withdrawing a product when it enters the decline phase of its product life cycle.

  Products in the decline phase are likely to be making a loss (1). Therefore, withdrawing a product should reduce the loss the business makes (1). Therefore, the business should have a greater level of retained profit to invest in new products (1).
• Explain one benefit to a business from improving the aesthetic element of a product's design mix.

  This may make the product appear more attractive compared to rival products (1). Therefore, the product may gain a unique selling point (1). Thus, the business may be able to charge a premium price (1).
• Explain one drawback to a business from differentiating its product.

  Differentiation could be expensive (1). Therefore, cash outflows may increase (1). This could cause the business to suffer poor cash flow (1).
• Explain one impact of a business from increasing globalisation.

  The opportunity to sell to more markets increases (1). Therefore, the business has the ability to generate global brand awareness (1). Thus, the business could make high levels of revenue (1).
• Explain one drawback to a business of using job production.

  This method of production is slower than batch or flow (1). Therefore, productivity may be lower (1). As a result, the cost of producing each unit may rise (1).
• Explain one advantage to a business of producing a high quality product.

  The business may be able to charge higher prices (1). This could increase the difference between revenue and cost (1). Therefore, the profit margin on each product may increase (1).
• Explain one benefit to a business of having a good relationship with its suppliers.

  Suppliers are more likely to give the business discounts on raw materials (1). This means that the variable costs per unit may fall (1). Therefore, the profit made on each item may increase (1).
• Explain one advantage to a business of improving its environmental sustainability.

  This may make the business appear more ethical (1). This may reduce pressure group activity (1). Therefore, the brand image of the business may improve (1).
• Explain one methods a business could use to differentiate its product.

  The business could add extra features to the product (1). This may make the product more attractive (1). As a result, it will catch the customer's attention (1).
• Explain one possible barrier to effective communication within a business.

  Using technical language or jargon (1). This may confuse employees (1). As a result, employees may not carry out a task correctly (1).