When George Brown left school he worked as a chef in several restaurants but he had always wanted to be his own boss, He set up City Cafe (CC) as a sole trader 15 years ago. He purchased a building with $10000 he receved from his grandfather and made it into a cafe, it is located in the centre of Main City, in country X. George works very hard and is willing to take risks. He creates his own recipes for the cafe and his customers like the food. CC has been successful every year and George has always paid himself a high salary. However, he now wants to increase the profit from CC by expanding the cafe. It is already open every day from 08:00 to 20:00 and in order to serve more customers he needs a larger cate. The cafe is located in a very busy shopping mall. George has undertaken some market research and found out that 50% of his customers visit the caft every day. The other 50% of customers visit less frequently and are often attracted by the special menu items on the board outside the cafe. George is considering two options for expansion. Option 1: Buy the building next door and make it into one larger cafe that can serve 50% more customers. The building became empty after a clothes shop closed. The cost of the shop is $20000 and it will cost $10 000 for redecorating and building work. Opion 2: Move to a new building 10 kilometres away in another part of the city. This building is twice as large as the existing cate and will cost $2000 a year to rent as it is not for sale. George wilf be allowed to redecorate and he will need to buy equipment for the kitchen. The total cost for this will be $5000. it is in a busy part of the city with many shoppers visiting the area. Daily Nows 2018 2 Fobruary The Government has forecast that interest rates will be increased later this year. This is very worrying for many local businesses that require finance. Country X has a fast growing economy and the Government does not want this to lead to higher inflation. A multinational cotfee shop chain wants to open calts in malls all over country X, attracted by the high rate of economic growth. Local businesses are worried about the competition from this business as it benefits from economies of scale. Some market researchers think that customers will prefer to stay with their local cafe and not use an international style of cafe. Appendix 2 Three applicants for the vacancy of chef (cook) Appendix 3 Cash flow forecast for CC for the second half of 2018 (\$000) 4: Operations management (Paper 2) 10 4(a) Identify and explain two reasons why quality is important for CC. Reason 1: Explanation:. Reason 2: Explanation: [8] 4: Operations management (Paper 2) Copyight \& UCLES 2019 11