™
Cambridge IGCSE
BUSINESS STUDIES
0450/21
Paper 2 Case Study
May/June 2021
INSERT
1 hour 30 minutes
*2317502265-I*
INFORMATION
• This insert contains the case study.
• You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.
This document has 4 pages. Any blank pages are indicated.
06_0450_21_2021_1.20
© UCLES 2021
[Turn over
2
Furniture Outdoors (FO)
FO has been a private limited company for 20 years. It is owned and run by the Chan family and
is located in country Z. In country Z the secondary sector has become relatively more important as
the country has developed. FO is a manufacturer of wooden furniture that is suitable for outdoor
use. Its products include tables, chairs and other outdoor furniture.
Customers order online from the FO website. The furniture is then delivered to customers in country
Z using FO’s own delivery vehicles. However, FO is considering changing to selling its furniture
through either wholesalers or large retailers in country Z.
The Chan family have the business objective of contributing to sustainable development. FO only
uses sustainably sourced wood when making furniture. This is from local forests in country Z and
the wood is more expensive than imported alternatives.
For many years FO shareholders have reinvested profits to provide the finance for growth. FO
recently took over 2 other furniture businesses in country Z and plans further takeovers. The Chan
family plan to continue to control and manage FO after this expansion. The leadership style of these
two companies is very different to that of FO and their factories are located several miles away
from FO in different regions of country Z.
FO need to manage all its resources effectively. It tries to use the same components such as nails,
brackets and paint for all its furniture designs. It is important to not run out of raw materials and so
orders to suppliers must be carefully planned to avoid late deliveries. FO want to keep wastage of
materials to a minimum. FO also need to consider how many employees are required to complete
each order.
Appendix 1 - FO website advertisement
FO - the only business to go to when you need new outdoor furniture for your garden.
FO produce a range of high quality furniture to meet all your needs for fashionable, well designed
outdoor furniture. Be reassured our furniture is only made from the highest quality wood from sustainable
forests.
Our furniture is only available online so order today and have your furniture delivered in the next few
weeks. Email any questions to us and we will reply quickly.
© UCLES 2021
06_0450_21_2021_1.20
3
Appendix 2
Extract of cost, selling price and sales data for one of FO’s products
Fixed cost per month
$10 000
Variable cost per table
$125
Selling price per table
$250
Forecasts sales for tables per month
100
Appendix 3
Newspaper article from the Daily News April 2021
Sustainable production needed to save the planet
A report from the International Committee for the Planet states that manufacturers must find more
sustainable ways to produce their products as global warming is becoming more of an issue.
The report suggests three main ways manufacturers can change:
•
•
•
Only use raw materials from sources that replace what they have used. This is estimated to
raise variable costs by 20%
Only use packaging that can be recycled. Costs are estimated to increase but the selling price
may not rise by more than 10%
Only use electric vehicles to deliver products. The cost of buying electric vehicles is more than
petrol or diesel vehicles. Using electric vehicles could enable variable costs to be reduced by
5%.
© UCLES 2021
06_0450_21_2021_1.20
4
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2021
06_0450_21_2021_1.20
™
Cambridge IGCSE
BUSINESS STUDIES
0450/22
Paper 2 Case Study
May/June 2021
INSERT
1 hour 30 minutes
*2931862969-I*
INFORMATION
• This insert contains the case study.
• You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.
This document has 4 pages. Any blank pages are indicated.
06_0450_22_2021_1.11
© UCLES 2021
[Turn over
2
Tandeep Toys (TT)
Tandeep is planning to set up a toy shop in country Z. He worked for a toy manufacturer for 10
years. Tandeep thinks he has enough knowledge of toys and customer needs to start his own
business.
Tandeep plans to sell a large range of toys which will include products for all ages of children from
babies through to teenagers. The toys will all be well known brands and aimed at higher income
groups. The most popular product is likely to be toy cars. Tandeep also plans to sell a range of
accessories for babies such as pushchairs (strollers) which he may have to import. Making sure
there is inventory to always meet demand is very important to the success of TT.
Tandeep has a loan of $40 000 from his family to invest in the business. He wants to set up as a
private limited company. He knows that he will need working capital to run his business. He may
offer credit to some customers for more expensive items such as nursery furniture. Tandeep knows
that there are several legal controls to protect consumers.
Tandeep has been looking at locations for his toy shop. He has identified two locations to choose
between as outlined in Appendix 1.
Tandeep will need to recruit several employees to work in his shop. He plans to recruit a shop
manager and 5 sales assistants. Tandeep will carry out all the administration. As part of the
recruitment process he will need to produce job descriptions, job specifications and then shortlist
applicants.
Appendix 1
Two possible locations for Tandeep’s shop
Location A
The shop is located in a popular shopping mall in the city centre. Parking is expensive and the rent
is high. The mall is open from 8.00 to 22.00 every day. There are several other toy shops located
in the mall as well as banks, a cinema and children’s playground.
Location B
The shop is located on a busy street in a local town. There are many other shops and a street
market in the area. Local people frequently visit the shopping area to buy food. Parking is always
available and is free. The rent is low. There are no other toy shops in the town.
Appendix 2
Information on channels of distribution for toy cars
Wholesaler in country Z
Manufacturer in country Z
Unit cost of toy car
$15
$5
Delivery time for orders
1 day
4 weeks
Minimum quantity that must be ordered 10 units
1000 units
Trade credit
3 months
© UCLES 2021
1 month
06_0450_22_2021_1.11
3
Appendix 3
Cash-flow forecast for the first 6 months of trading for TT ($)
July
Aug
Sept
Oct
Nov
Dec
Cash sales
600
1 000
1000
1 000
2 000
2 000
Rent and
wages
500
500
500
500
500
500
Purchases of
300
inventory
100
100
100
100
100
Shop
equipment
40 000
Net flow
(40 200)
400
400
400
1 400
1 400
Opening
balance
40 000
(200)
200
600
1000
2 400
Closing
balance
(200)
200
600
1 000
2 400
3 800
© UCLES 2021
06_0450_22_2021_1.11
4
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2021
06_0450_22_2021_1.11
™
Cambridge IGCSE
BUSINESS STUDIES
0450/23
Paper 2 Case Study
May/June 2021
INSERT
1 hour 30 minutes
*9030633940-I*
INFORMATION
• This insert contains the case study.
• You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.
This document has 4 pages. Any blank pages are indicated.
06_0450_23_2021_1.14
© UCLES 2021
[Turn over
2
Ruben’s business (RB)
Ruben studied Business Studies at school. After he left school he worked in a fast food takeaway
serving customers. Ruben has inherited $50 000 from his grandparents and wants to start a new
business (RB). However, he is aware that starting a business has a high risk of failure.
To reduce the risk involved he is considering buying a fast food franchise. If he chooses to buy a
franchise this will cost $50 000 and Ruben will have to decide on a suitable source of finance. A
basic menu of food will be provided by the franchisor. This will include burgers and fried chicken.
The franchisee is allowed to add local dishes to the menu. Ruben wants to only buy ingredients
from local suppliers as this will reduce the distance the ingredients are transported.
Ruben will need to recruit employees. This could be either 4 full-time or 8 part-time employees.
Ruben is aware there are many legal controls over employment. He plans to pay his employees
only the minimum wage. Many other fast food takeaways pay above the minimum wage.
Ruben has analysed the market research shown in Appendix 1. He is planning a marketing campaign
that will include advertising aimed at children. Young children will also be given free toys with their
food. Ruben is aware that RB’s customers will want the food prepared quickly and at a competitive
price. At certain times of the day, more food will need to be prepared and ready to serve.
Appendix 1
Market research data for the fast food industry 2019 and 2020
graph to show age of customers
using fast food takeaways
graph to show gender of customers
using fast food takeaways
100
100
70%
key
key
60%
male
percentage
of customers
female
40%
15 and under
percentage
of customers
50%
25%
15%
10%
2019
2020
0
year
© UCLES 2021
16–18
19–29
30%
0
50%
20%
2019
2020
year
06_0450_23_2021_1.14
20%
10%
30 and over
3
Appendix 2
Newspaper Article
The Government is concerned about the environmental damage caused by fast food takeaways.
Most of the litter in the streets comes from plastic cups and packaging. Takeaway food businesses
do not want to change to more environmentally friendly alternatives as they are more expensive
than plastic ones.
A Government spokesperson said: ‘Fast food takeaway businesses provide local employment for
a large number of people. They also provide tax revenue.’
Appendix 3
Information for alternative sources of finance for Ruben
The new franchise will cost $50 000.
© UCLES 2021
Source of finance
Additional Information
Bank loan over 1 year
5% interest for the year
Bank loan over 3 years
3% interest every year
Inheritance from grandparents
No interest charged, but if the cash is placed in a
bank savings account it could earn 6%
06_0450_23_2021_1.14
4
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2021
06_0450_23_2021_1.14
™
Cambridge IGCSE
*2317502265*
0450/21
BUSINESS STUDIES
May/June 2021
Paper 2 Case Study
1 hour 30 minutes
You must answer on the question paper.
You will need: Insert (enclosed)
INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.
INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
• The insert contains the case study.
This document has 12 pages. Any blank pages are indicated.
06_0450_21_2021_1.17
© UCLES 2021
[Turn over
2
1
(a) Explain four reasons for changes in the relative importance of the primary, secondary and
tertiary sectors in a country.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 3:..........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 4: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_21_2021_1.17
[8]
3
(b) Consider the following three problems for FO as it grows through takeovers. Which problem
will be the easiest for FO to overcome? Justify your answer.
•
•
•
More difficult to control the business
Lack of finance
Clash of business cultures
More difficult to control the business: ...............................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Lack of finance: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Clash of business cultures: ...............................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_21_2021_1.17
[Turn over
4
2
(a) Explain two reasons why it is important for FO to manage all of its resources effectively when
manufacturing products.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation:.......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_21_2021_1.17
[8]
5
(b) Consider the benefits and limitations of the following three methods of communication FO
could use. Which method of communication would be most suitable when contacting suppliers
about a late delivery? Justify your answer.
•
•
•
Email
Mobile (cell) phone
Letter
Email: ................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Mobile (cell) phone: ..........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Letter: ...............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_21_2021_1.17
[Turn over
6
3
(a) Explain how one internal source and one external source of finance could be used by FO as
it expands.
Internal source of finance: ................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
External source of finance: ...............................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_21_2021_1.17
[8]
7
(b) Consider the advantages and disadvantages to FO of using a wholesaler, retailer or selling
direct to the customer when distributing its products. Which channel of distribution should FO
use? Justify your answer.
Wholesaler: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Retailer: ............................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Selling direct to customer: ................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_21_2021_1.17
[Turn over
8
4
(a) Using the information in Appendix 2:
(i)
Calculate the break-even level of output per month
................................................................................................................................
................................................................................................................................
................................................................................................................................
[2]
(ii) Calculate the margin of safety per month for tables:
................................................................................................................................
................................................................................................................................
................................................................................................................................
[2]
(iii) Identify four limitations of using break-even analysis.
Limitation 1:............................................................................................................
................................................................................................................................
Limitation 2:............................................................................................................
................................................................................................................................
Limitation 3:............................................................................................................
................................................................................................................................
Limitation 4:............................................................................................................
................................................................................................................................
© UCLES 2021
06_0450_21_2021_1.17
[4]
9
(b) Refer to Appendix 2 and Appendix 3 and other information. Consider the following three ways
FO could use to contribute to sustainable development:
•
•
•
only use raw materials from sources that replace what they have used
only use packaging that can be recycled
only use electric vehicles to deliver products.
Which way should FO choose to maximise profit? Justify your answer.
Only use raw materials from sources that replace what they have used: ........................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Only use packaging that can be recycled: ........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Only use electric vehicles to deliver products: .................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_21_2021_1.17
10
BLANK PAGE
© UCLES 2021
06_0450_21_2021_1.17
11
BLANK PAGE
© UCLES 2021
06_0450_21_2021_1.17
12
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2021
06_0450_21_2021_1.17
™
Cambridge IGCSE
*2931862969*
0450/22
BUSINESS STUDIES
May/June 2021
Paper 2 Case Study
1 hour 30 minutes
You must answer on the question paper.
You will need: Insert (enclosed)
INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.
INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
• The insert contains the case study.
This document has 12 pages. Any blank pages are indicated.
06_0450_22_2021_1.11
© UCLES 2021
[Turn over
2
1
(a) Explain two advantages and two disadvantages of setting up a business as a private limited
company.
Advantage 1: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Advantage 2: ....................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 1: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage 2: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_22_2021_1.11
[8]
3
(b) Consider the following three factors that affect the location of TT’s shop. Which of the locations
in Appendix 1 should Tandeep choose? Justify your answer.
•
•
•
Customers in the area
Rent
Types of shops nearby
Customers in the area: .....................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Rent: .................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Types of shops nearby: ....................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_22_2021_1.11
[Turn over
4
2
(a) Explain one likely advantage and one likely disadvantage for Tandeep if he decides to import
the pushchairs (strollers) he sells.
Advantage: .......................................................................................................................
...........................................................................................................................................
Explanation:.......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Disadvantage: ...................................................................................................................
...........................................................................................................................................
Explanation:.......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_22_2021_1.11
[8]
5
(b) Refer to Appendix 2 and other information. Consider the advantages and disadvantages of
TT purchasing toy cars either from a wholesaler or manufacturer. Which channel of distribution
should TT choose? Justify your answer.
Wholesaler in country Z: ...................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Manufacturer in country Z: ................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_22_2021_1.11
[Turn over
6
3
(a) Explain two reasons why the cash-flow forecast in Appendix 3 is important to TT.
Reason 1: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_22_2021_1.11
[8]
7
(b) Consider how a job description, job specification and the shortlist of candidates will be helpful
in the recruitment process for TT. Which is the most important stage to ensure Tandeep recruits
the best person to be a manager at TT? Justify your answer.
Job description: ................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Job specification: ..............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Shortlist of candidates: .....................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
© UCLES 2021
06_0450_22_2021_1.11
[Turn over
8
4
(a) Explain four reasons why the level of inventory is important to TT.
Reason 1: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 2: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 3: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Reason 4: .........................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
06_0450_22_2021_1.11
[8]
9
(b) Consider how the following three legal controls will affect TT. Which legal control will have the
greatest effect on TT? Justify your answer.
•
•
•
No misleading promotion
All goods must be safe for the consumer
Restrictions on the type of packaging allowed
No misleading promotion: .................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
All goods must be safe for the consumer: ........................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Restrictions on the type of packaging allowed: ................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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Conclusion: .......................................................................................................................
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Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2021
06_0450_22_2021_1.11
™
Cambridge IGCSE
*9030633940*
0450/23
BUSINESS STUDIES
May/June 2021
Paper 2 Case Study
1 hour 30 minutes
You must answer on the question paper.
You will need: Insert (enclosed)
INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.
INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
• The insert contains the case study.
This document has 12 pages. Any blank pages are indicated.
06_0450_23_2021_1.14
© UCLES 2021
[Turn over
2
1
(a) Explain four factors that may influence the location of a tertiary sector business.
Factor 1: ...........................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 2: ...........................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 3: ...........................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Factor 4: ...........................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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[8]
3
(b) Explain how the following three factors could cause Ruben’s new business to fail:
•
•
•
Lack of management experience
Insufficient working capital
Poor planning
Which factor do you think is most important to Ruben? Justify your answer.
Lack of management experience: ....................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Insufficient working capital: ...............................................................................................
...........................................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Poor planning: ..................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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[Turn over
4
2
(a) Using Appendix 2, explain one external cost and one external benefit of Ruben’s business.
External cost: ....................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
External benefit: ................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
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[8]
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(b) Consider the following three possible ethical issues for Ruben’s business:
•
•
•
Advertising aimed at children
Seeking profit maximisation by paying low wages
Only buying from local suppliers.
Which do you think will have the greatest effect on Ruben’s business? Justify your answer.
Advertising aimed at children: ..........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Seeking profit maximisation by paying low wages: ..........................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Only buying from local suppliers: ......................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Conclusion: .......................................................................................................................
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........................................................................................................................................... [12]
© UCLES 2021
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[Turn over
6
3
(a) Explain the possible effect of four legal controls over employment on Ruben’s business.
Legal control 1: .................................................................................................................
Effect on Ruben’s business: .............................................................................................
...........................................................................................................................................
...........................................................................................................................................
Legal control 2: .................................................................................................................
Effect on Ruben’s business: .............................................................................................
...........................................................................................................................................
...........................................................................................................................................
Legal control 3: .................................................................................................................
Effect on Ruben’s business: .............................................................................................
...........................................................................................................................................
...........................................................................................................................................
Legal control 4: .................................................................................................................
Effect on Ruben’s business: .............................................................................................
...........................................................................................................................................
...........................................................................................................................................
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[8]
7
(b) Consider the benefits of having part-time employees or full-time employees. Which do you
think Ruben should choose for his business? Justify your answer.
Part-time employees: ........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Full-time employees: ........................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
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...........................................................................................................................................
...........................................................................................................................................
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........................................................................................................................................... [12]
© UCLES 2021
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[Turn over
8
4
(a) Explain two ways the market research data shown in Appendix 1 could help Ruben make
business decisions.
Way 1: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Way 2: ...............................................................................................................................
...........................................................................................................................................
Explanation: ......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
© UCLES 2021
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[8]
9
(b) Consider the advantages and disadvantages of the three sources of finance outlined in
Appendix 3 if Ruben chooses to buy the franchise. Which source of finance should Ruben
choose? Justify your choice using cost calculations for each source.
Bank loan 1 year: ..............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Bank loan 3 years: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Inheritance from grandparents: ........................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Recommendation: ............................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
........................................................................................................................................... [12]
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10
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© UCLES 2021
06_0450_23_2021_1.14
11
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© UCLES 2021
06_0450_23_2021_1.14
12
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
© UCLES 2021
06_0450_23_2021_1.14