Case Study: 1

PR is a pottery business. It is well-known for making hand-decorated pots and vases. These are sold in craft stores and art galleries. A new managing director wants to develop new markets and plans to increase production by using equipment that will replace most of the jobs of skilled workers.

(a) Explain whether the new managing director is trying to make PR more labor intensive or more capital intensive. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4]

Case Study: 2

Globalization has changed the way many businesses operate. VKW makes cell (mobile) phones. It uses just-in-time inventory control. VKW exports 40% of its products. It imports most of its raw materials to help reduce total costs. All 800 of VKWs employees understand the importance of quality assurance. The Operations Director has asked all suppliers to ensure they do not use child labor. She is also concerned that many governments are planning to increase import controls such as quotas.

(a) Define globalization. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4]

(b) State two advantages to a business of using quality assurance.

Advantage 1: .................................................................................................................... ........................................................................................................................................... Advantage 2: .................................................................................................................... ........................................................................................................................................... [4] (c) Outline two ways VKW might be affected by increased import controls. Way 1: ............................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Way 2: ............................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... [4] (d) Explain one advantage and one disadvantage to VKW of using just-in-time inventory control. Advantage: ....................................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... Disadvantage: ................................................................................................................... ........................................................................................................................................... Explanation: ...................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ...........................................................................................................................................