90196 Producers Q ONE (a) What is an advantage of the partnership form of business ownership? Simple to set up. Skills can be combined. Profits are shared only between partners. (b) Identify what type of partner Grant’s father is? Sleeping partner/silent partner
90196 Producers Q ONE (c) Describe what the most important goal is likely to be in the early stages of the business. Sales maximization/Provide quality service. (d) Explain your answer to (c). In the early stages of a business it is important to establish the market share and the level of sales/or provide quality service to encourage return customers.
90196 Producers Q ONE (e) Identify the sector of the economy that Marshalls belongs to. Tertiary Sector (f) (i) Describe how this sector has become more important to the economy in the last fifty years. The tertiary sector has increased in size over the last 50 years. A much greater proportion of the workforce are now employed in this sector.
90196 Producers Q ONE (f) (ii) Explain TWO reasons that have led to this change occurring. The demand for services has grown because people are relatively wealthier than they were 50 years ago. New services such as restaurants, tourism and entertainment have become available. More people are now living in urban areas so they have better access to more services
90196 Producers Q TWO (a) Explain two advantages of becoming a company rather than remaining as a partnership. Achieved: Limited Liability. Merit: Grant and Janes’s personal assets are protected in the event of business failure. They would lose only their shares in the business. Achieved: Greater availability of funds. Merit: Marshalls can issue shares or debentures to increase the funds in their business. Achieved: Perpetual Succession. Merit: the company can continue even if Grant or Jane decide to leave it. OR OR
90196 Producers Q TWO (b) Describe the management structure of Marshalls. Centralised Management structure (c) Explain two advantages of the management structure described in (b) above. Grant and Jane have control over all parts of the business. Decision making is efficient because they do not have to consult with other people. Grant and Jane are responsible for all decision which are made.
90196 Producers Q THREE (a) (i) Identify the type of business expansion the Marshalls have undertaken. Horizontal integration. (ii) Explain what this type of business expansion means. A firm buys another firm in the same industry and the same level of the supply chain.
90196 Producers Q THREE (b) Explain TWO advantages to Grant and Jane of the business expansion. Gain greater market share/ Reduce competition/ Internal economies of scale/ Better able to compete against multinational companies.
90196 Producers Q THREE (c) Define, using examples relevant to Marshalls, the term investment. Investment is spending by firms on man-made/capital resources such as buildings, shelves, counters, cash registers. OR (d) What is the factor reward (return for human resources) for the employees of Marshalls? Wages
90196 Producers Q FOUR (a) What type of business expansion is described above? Diversification (b) Explain TWO benefits to Marshalls of this type of expansion? The benefits to the Marshalls are that the range of products that they sell has increased. They no longer have ‘all their eggs in one basket’. Their revenue is coming from a variety of sources and they can spread their risk.
90196 Producers Q FOUR (c) Explain how productivity can be increased with the introduction of a computerised stock control system. Productivity is output divided by input. A computerised stock control system would decrease the amount of time taken compared to a manual system to record stock. So output would increase with the same amount of time input therefore productivity would increase. OR
90196 Producers Q FOUR bonus E
90196 Producers Q FIVE (a) What is the economic term used to describe the situation presented in the resource Economies of scale (b) Fully explain the advantage to Marshalls Ltd in belonging to the buying group. Grant and Jane can purchase their stock relatively cheaper by belonging to the buying group – this reduces their cost of production. Therefore they can sell their stock to the consumer at a reduced rate and increase sales and increase revenue.
90196 Producers Q FIVE (c) Describe the management structure of Marshalls Ltd illustrated in the organisation chart. Decentralised management structure. (d) Explain how the management structure has changed for Marshalls Ltd. The organisational structure has become decentralised because the expanding business requires Grant and Jane to hand over the management of their stores because they cannot manage all of them due to time constraints.
90196 Producers Q SIX Use the photographs to identify the resources used in the manufacture of fine wool jerseys by completing the table below with THREE resources in each category. Examples: Natural: Land for sheep, sheep, land for woollen mill, Man-Made: shearing shed, woollen mill, knitting machine, factory building Human: farmer/shepherd, shearer, mill worker, managers.
90196 Producers Q SEVEN (a) What is the term used to describe the two way reliance between Marshalls Ltd and the service industries. Interdependence (b) Explain the two way reliance between Marshalls Ltd and the marketing firm which it uses. Marshalls Ltd relies on the marketing firm to advertise and promote its products and the marketing firm relies on Marshalls Ltd to use its services to continue to earn an income/profit/revenue. OR
90196 Producers Q SEVEN (c) Explain the services that an Accountant would provide to Marshalls Ltd. Accounting services: Collecting and processing financial data; preparing financial reports; providing analysis and interpretation of the firm’s performance; offering advice on running a business. OR