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Internal operations of a large business · Part 3 of 6
15 exam-style questions with model answers, plus 25 quick multi-choice questions — every question on this part of the standard, grouped by the 5 pages of notes they come from.
Write a full answer before you reveal the model one. That comparison is where the learning happens.
Identify a production process a large bakery might use, and explain why it could be an advantage for the business.
Why could flow production be a disadvantage for a business, and how might this negatively impact the business?
An invented Nelson seafood processor currently uses batch production to pack four species into six pack formats. Demand for one format — a standard 500 g frozen pack — now makes up 60% of its volume. Management is considering installing a dedicated flow line for that pack.
Referring to unit costs and customer relationships, justify, with TWO reasons, whether it should install the line.
Explain what is meant by just-in-time stock control.
A New Zealand manufacturer that imports components adopts just-in-time stock control.
Fully explain ONE risk of this decision and how it could negatively impact the business.
An invented Auckland appliance assembler is deciding whether to adopt full just-in-time stock control for its imported components, or to hold four weeks of buffer stock.
Referring to costs and reliability of supply, justify, with TWO reasons, which approach would be more appropriate.
A factory produces 4,500 units a month with 30 production staff. Calculate its labour productivity and explain what the figure means.
Fully explain how an increase in labour productivity could positively impact a large manufacturing business.
A large business can raise productivity either by investing in automated equipment or by investing the same amount in staff training.
Referring to unit costs and staff motivation, justify, with TWO reasons, which investment would be more appropriate for a business whose products change design frequently.
Explain what is meant by economies of scale, using an example.
Explain why an increase in freight charges will affect the economies of scale of a large New Zealand business, and how this could impact the business.
A large New Zealand food manufacturer is considering doubling the size of its main plant to lower unit costs.
Referring to unit costs and communication, justify, with TWO reasons, whether it should expand the existing plant or open a second plant in another region.
Using a specific example, explain an advantage of using parts of a business that are currently under-used.
Explain why operating at capacity could be a disadvantage, and how this could negatively impact a business.
An invented Wellington craft brewery is running at 95% capacity and has been offered a large ongoing supermarket contract it could not fill without expanding.
Referring to competitiveness and profits, justify, with TWO reasons, whether it should invest in additional capacity.