0450 Business Studies June 2025 Question Paper 12

NFC manufactures shoes using batch production. Quality assurance is used to maintain quality. NFC uses market segmentation. The Marketing Director is reviewing NFC’s product range. He 1 knows there are both benefits and limitations to developing new products. He also knows the promotion of products is important. Define ‘batch production’. (a) [2] Identify two aims of promotion. (b) Aim 1: Aim 2: [2] Outline one advantage and one disadvantage to NFC of using quality assurance. (c) Advantage: Disadvantage: [4] , , Explain two benefits to NFC of using market segmentation. (d) Benefit 1: Explanation: Benefit 2: Explanation: [6] Do you think the benefits for a business of developing new products are greater than the limitations? Justify your answer. (e) [6] , ,

FLD is a furniture retailer. It has 460 shops and 20000 employees. Internal recruitment is used when recruiting new shop managers. The Managing Director wants to know whether job rotation 2 is the best method of motivation for a large business to use. The Finance Director is reviewing FLD’s income statement. An extract is shown in Table 2.1. She is concerned that FLD’s gross profit is decreasing. Table 2.1 Extract from FLD’s income statement for year ending April 2025 ($ million) 400 Revenue 200 Gross profit 60 Expenses 140 Profit Define ‘profit’. (a) [2] Identify two expenses a business might have. (b) Expense 1: Expense 2: [2] Outline two possible reasons why FLD’s gross profit is decreasing. (c) Reason 1: Reason 2: [4] , , Explain two advantages to FLD of using internal recruitment when recruiting new managers. (d) Advantage 1: Explanation: Advantage 2: Explanation: [6] Do you think job rotation is the best method for a large business to use to motivate its employees? Justify your answer. (e) [6] , ,

Hal wants to be a successful entrepreneur. He plans to leave his job to start up a bakery. The bakery will operate in the private sector. The business will have many stakeholder groups. Hal has 3 been told it is important for a new business to select an appropriate source of start-up capital. He also knows new businesses are at a greater risk of failure. Define ‘private sector’. (a) [2] Identify two reasons why new businesses are at a greater risk of failure. (b) Reason 1: Reason 2: [2] Identify four stakeholder groups a business might have. (c) Stakeholder 1: Stakeholder 2: Stakeholder 3: Stakeholder 4: [4] , , Explain two characteristics Hal will need to become a successful entrepreneur. (d) Characteristic 1: Explanation: Characteristic 2: Explanation: [6] Do you think a bank loan is the best source of start-up capital for a new business? Justify your answer. (e) [6] , ,

MHL manufactures tyres for large vehicles. It has factories in 6 countries. The business creates external costs when producing its products. Good communication with MHL’s suppliers is important. 4 The Managing Director knows globalisation provides many opportunities for MHL. She is reviewing data for one of MHL’s factories as she wants to reduce the average cost of the tyres. An extract from this data is shown in Table 4.1. Table 4.1 Data for one of MHL’s factories 200000 Output per month (units) $500000 Fixed costs per month$25 Variable cost per unit Define ‘average cost’. (a) [2] Calculate total variable cost per month. Show your working. (b) Working: Final answer: [2] Outline two external costs MHL might create when producing its products. (c) External cost 1: External cost 2: [4] , , Explain two opportunities of globalisation for MHL. (d) Opportunity 1: Explanation: Opportunity 2: Explanation: [6] Explain two methods of communication a business could use to communicate with its suppliers. Which is likely to be the best method to use? Justify your answer. (e) [6] , ,