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Centre Number Candidate Number Candidate Name UNIVERSITY OF CAMBRIDGE LOCAL EXAMINATIONS SYNDICATE Joint Examination for the School Certificate and General Certificate of Secondary Education BUSINESS STUDIES 7115/2 PAPER 2 OCTOBER/NOVEMBER SESSION 2001 1 hour 45 minutes Candidates answer on the question paper. No additional materials are required. TIME 1 hour 45 minutes INSTRUCTIONS TO CANDIDATES Write your name, Centre number and candidate number in the spaces at the top of this page. Read the passage and answer all questions. Write your answer in the spaces provided on the question paper. INFORMATION FOR CANDIDATES The number of marks is given in brackets [ ] at the end of each question or part question. The business described in the case study is entirely fictitious. FOR EXAMINER’S USE 1 2 3 4 5 6 7 TOTAL This question paper consists of 9 printed pages and 3 blank pages. SB (CW/JG) QK11517/1 © UCLES 2001 http://www.xtremepapers.net [Turn over 2 Bennetti Carbone Ltd Bennetti Carbone Ltd is a private limited company. It is a specialist clothing manufacturer that designs, makes and sells exclusive products for the retail trade. Its clothes are aimed at young women in the 18 to 30 age range who are interested in fashion. To begin with the business produced only dresses but recently it has diversified into beach and leisure wear and fashion accessories. This has meant that its sales show a seasonal pattern of demand, although the trend is upwards. 5 ‘Gross profit margins are high’ said Bennetti. ‘We calculate that a new dress might have a unit direct cost of $79 and we aim to sell it for $149.’ Figs 1 and 2 (see page 4) give some details about the sales, profits and capital employed by the company. ‘The line of business that we are in is high risk. Fashion trends are constantly 10 changing. We try to predict what customers will want and then aim to satisfy their demand. This means that if we get our sales forecasts wrong or we deliver too late we are left with large amounts of stock. This causes all sorts of difficulties for us, particularly cash flow problems.’ ‘Investment in new computerised methods of clothing design is needed to improve 15 our efficiency. We also need to spend a lot more capital on new technology in our factory. Our production methods are now quite old fashioned compared to those of our competitors.’ 7115/2/O/N/01 For Examiner’s Use 3 1 Explain the following terms used in the case. (a) Private limited company (line 1) .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... (b) Seasonal pattern of demand (line 6) .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... (c) Gross profit margins (line 7) .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... (d) Sales forecasts (line 12) .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... [12] 7115/2/O/N/01 [Turn over For Examiner’s Use 4 2 (a) What is meant by a market orientated company? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[4] (b) Do you think that Bennetti Carbone Ltd is market orientated? Explain your answer. .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[4] Bennetti Carbone Ltd $m 60 Sales 40 Capital 20 0 Profit 1996 1997 1998 1999 2000 10 17 22 26 40 Capital 20 25 30 35 35 2 7 7 10 20 Sales Profit Fig. 1 % of Profits by Product Range Year Clothing 1996 1997 1998 1999 2000 90 85 80 70 70 Leisure Wear 9 12 16 25 25 Fashion Accessories 1 3 4 5 5 Fig. 2 7115/2/O/N/01 For Examiner’s Use 5 3 Refer to the data in Figs 1 and 2. (a) Identify the main changes in the performance of the business between 1996 and 2000. Use the data to help illustrate your answer. .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[8] (b) Calculate the change in profits made from clothing between 1996 and 2000. .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[4] 7115/2/O/N/01 [Turn over 6 4 (a) Why do you think that Bennetti Carbone Ltd needs to invest in new computerised methods in clothing design and production? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[8] (b) What factors should the management of Bennetti Carbone Ltd consider in deciding on the sources of finance to use for such capital investment? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[8] 7115/2/O/N/01 For Examiner’s Use 7 5 Businesses sometimes find that their employees do not have the appropriate skills needed for the future. For Examiner’s Use (a) Explain why this might be a problem for Bennetti Carbone Ltd. .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[4] (b) How would you suggest that the personnel manager might deal with this problem? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[6] 7115/2/O/N/01 [Turn over 8 6 (a) Explain why Bennetti Carbone Ltd might sometimes hold large stocks of finished clothes. .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[6] (b) What problems does stock holding cause for a business like Bennetti Carbone Ltd? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[8] 7115/2/O/N/01 For Examiner’s Use 9 7 Bennetti Carbone Ltd targets its products at a particular market segment. (a) Why do you think that it does this? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[4] (b) What disadvantages might there be in segmenting a market? .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[4] 7115/2/O/N/01 For Examiner’s Use 10 BLANK PAGE 7115/2/O/N/01 11 BLANK PAGE 7115/2/O/N/01 12 BLANK PAGE 7115/2/O/N/01
