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NB! Read this tutorial letter first.

It contains the compulsory assignments.




2 MNB1601/101




Please keep this tutorial letter in a place where you can

refer to it easily since it contains information on a number
of important administrative procedures, and important
hints on how to approach your studies and answer the
multiple-choice questions.
3 MNB1601/101

Dear Student


Welcome to the Department of Business Management, and specifically to

the module MNB1601 (previously MNB102E). We trust that you will find
this module interesting and stimulating.

The purpose of the Business Management 1 paper is to give you an

overview of what happens in the business world, and more specifically
how a business is managed. The tutorial matter is obviously only an
introduction to what management is all about, but we trust that you will
gain sufficient insight, from this tutorial matter, into the various business
functions and that, in turn, you will be able to choose suitable study

For some of you this will be the very first time you are being introduced to
the business world, and some of the concepts will be completely new. For
others, who may have studied Business Management (or Business
Economics) at school, or who have worked for some time in the business
world, these concepts may be a boring repetition. To these students we
would say: please bear with us in the knowledge that we have a vast
range of students from all walks of life studying this subject.


You will receive a number of tutorial letters during the year. A tutorial letter
is our way of communicating with you about teaching, learning and

All tutorial letters are numbered, 101, 201, 202, etc. From time to time
however, you will receive a MNALLE-Q Tutorial Letter. This particular
tutorial letter is sent to all undergraduate Business Management students.
Sometimes there will be information in MNALLE-Q tutorial letters which
will not apply to first-year students.
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3.1 General

We would like to start by inviting you to contact the Business Management

1 lecturers in writing, by e-mail, by telephone, or personally by
appointment should you encounter problems with any subject matter in
your studies. Please note, however, that the academic staff cannot
deal with any queries about administrative matters.

In order to avoid delays and unnecessary telephone calls, the following

guidelines are given so that your enquiries are directed to the right person.

3.2 Academic matters

Contact addresses of the various administrative departments are

included in My studies @ Unisa, which you received with your
study package. The general Unisa Contact Centre (UCC) number
is 086 167 0411.

You may contact your lecturers by post, e-mail, telephone or on

the myUnisa website.

Physical address:

University of South Africa

Preller street
City of Tshwane
Postal address:
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The Head: Business Management 1

Department of Business Management
P0 Box 392

For academic enquiries, please use the following number:
(012) 429-4239.

Fax number: +27 12 429 4150

E-mail address:

Unisa Call Centre telephone number: 0861 670 411


Online address:

NB: When phoning Unisa, always have your student number


Please make an appointment beforehand if you want to visit a lecturer

personally. Lecturers often have prior appointments, a fact which may
cause disappointment if you arrive at the University without having first
arranged an interview. Our physical location on campus is:

Third level, AJH vd Walt Building

Main Campus, Muckleneuck, Pretoria
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3.3 Administrative matters

All enquiries about administrative matters, such as registration, despatch

of tutorial matter and change of address, should be directed to:

The Registrar (Academic)

PO Box 392

Please note:

You may enclose more than one letter in the same envelope, but
please don't write to our department, another department, the
library and/or an administrative department in the same letter.
This will cause delays. Write a separate letter to each one and
mark each letter clearly for the attention of the department

Do not include any correspondence with your assignments and

never write to Unisa without stating your student number, course
and module code (e.g. Business Management 1B, MNB1601)
clearly at the top of your letter.


When you registered you received, together with your tutorial matter, an
only the items that were available at the Despatch Department in Pretoria
or Unisa's regional offices at the time of registration.

Students who registered at a regional office will receive the remainder of

the tutorial matter (if applicable) by registered post from Pretoria.

You must check the tutorial matter you received against the inventory list.
Unless stated otherwise (e.g. "out of stock"), you should receive all the
items listed in the letter. If any items are missing, please carry out the
instructions given on the back of the inventory letter.
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NB: Use only the telephone number stated in the inventory

letter, namely (012) 429-4104, when making enquiries at the
Despatch Department about missing tutorial matter.


The study material for Business Management 1B consists of the following:

- one prescribed book for both modules MNB1501 and

MNB1601 (which you must purchase yourself)
- one study guide for each module (also available on the
myUnisa website)
- tutorial letters for each module which will be sent to you during
the course of the semester (also available on the myUnisa
- one DVD covering the topic of financial management.

- To access the study material via myUnisa:

Go to
Log in with your student number and password
Select the module from the orange bar
Click on official study material in the left menu
Click on the study material that you want to download

Inventory letter: You will have received an inventory letter containing

information about your tutorial matter. Also see the
brochure entitled My studies @ Unisa (which you
received with your tutorial matter).

NB: Tutorial matter not available at the time of

registration will be sent to you as soon as it
becomes available.
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5.1 Prescribed literature


The only prescribed book for both modules is:
Du Toit, GS. Erasmus, BJ & Strydom, JW. 2010. Introduction to Business
Management. 8 edition. Cape Town: Oxford University Press

A study guide will be issued to you upon registration. The study guide is
intended to guide you in your study of the prescribed book. Examination
and assignment questions are, however, based mainly on the prescribed

Since both modules are based almost entirely on the prescribed book, you
are urged to obtain this book as soon as possible.

NB: The prescribed book cannot be ordered from Unisa.

Please consult the list of official booksellers and their
addresses in My studies @ Unisa.

If you have any difficulties with obtaining books from these

bookshops, please contact the Registrar as soon as
possible at telephone number (012) 429-4152 or the Contact
Centre at 086 167 0411.

If you have any difficulties with obtaining books from

these bookshops, please contact
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5.2 Which parts of the prescribed book must I study?

Please note that the prescribed book mentioned above will be used for
both MNB1501 and MNB1601.

For MNB1601 you need to study the following chapters in the prescribed

Chapters 10 14.

You also need to study all the topics in your study guide.


6.1 Compulsory assignments and due dates

The University has a policy of compulsory assignments in all modules for

2011. Both assignments 01 and 02 for MNB1601 are thus compulsory
assignments. You must submit ASSIGNMENT 01 in order to obtain
admission to the examination. Admission will be obtained by submitting
the assignment and not on the strength of the marks you obtain for it.
Failure to submit Assignment 01 will mean that you will not be admitted to
the examination, regardless of whether or not you submit Assignment 02.

You will receive feedback on both the assignments in Tutorial Letter



Please ensure that your assignments reach us on or before the due

dates. You will not be admitted to the examination if an assignment
is submitted later than the due dates. Please do not phone us with
a request to be admitted to the examination if you have not
submitted an assignment, or if you submitted it later than the due
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Different unique numbers are allocated to the two assignments for the
first and the second semesters. Please make sure that you provide the
correct unique number on the mark-reading sheet. For instructions on
how to use the mark-reading sheet, refer to section 6.6 of the tutorial

The compulsory assignments for 2011 for the module MNB1601 are set
out in Appendix A of this tutorial letter. The same assignments are set for
both semesters.

Assignment First semester Second semester

number Due Date Unique Due Date Unique
number number
01 14 March 845169 22 August 707481
2011 2011
02 11 April 2011 733083 12 September 859507
Please note: Students registering for MNB1501 for the first time
(in any semester) may not submit the assignments for MNB1601
in the same semester; the computer will reject such an
assignment. It is the policy at UNISA that students need to pass
MNB101D/MNB1501 first before registering for MNB1601.

There is only one exception, and this is for postgraduate students

ONLY. Postgraduate students are allowed to be registered for
both MNB1501 and MNB1601 in the same semester. These
students may submit assignments for both MNB1501 and
MNB1601 in the same semester.

6.2 Year mark for MNB1601

The main purpose of the assignments is to encourage you to study the

prescribed book, to read certain sections over and over again, and to think
about the tutorial matter in terms of its practical application. With these
remarks in mind, the questions may sometimes be difficult, and some may
seem ambiguous. The idea is not to trick you or catch you out, but to make
you think.
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Formative assessment for MNB1601 takes place through a year mark

system. Both assignments are compulsory. You will be allocated a mark for
Assignment 01 and a mark for Assignment 02. The best\highest mark will
be taken as your year mark. Your final assessment mark for this
module will therefore be a combination of the assignment mark and
the examination mark.

The assignment mark (the best\highest mark of the two assignments) will
contribute a maximum of 10% to the final assessment mark for the
module, while the examination mark will contribute 90%.

Irrespective of the year mark obtained, a sub minimum of 40% must be

obtained in the examination. You will therefore not pass the module if your
examination mark is less than 40%.

Please study the following examples to see how the assignment mark (the
highest mark of the two assignments) will contribute to the final
assessment mark:

Example 1:

If you get an assignment mark of 50%, this mark of 50% is then multiplied
by 0,1 which equals 5% of the final assessment mark. If the learner obtains
35 out of a possible 70 marks in the examination (50%), this percentage is
then multiplied by 0,9 which equals 45% of the final assessment mark. The
assignment mark and the examination mark are then combined (5% +
45%) to give a final assessment mark of 50% for the module.

Example 2:

If you get an assignment mark of 60% this mark, multiplied by 0,1 gives 6%
of the final assessment mark. If the learner then obtains 44 out of 70
marks (or 63%) in the examination, this figure is then multiplied by 0,9 to
give 56.7%. The two results are then combined to give a final assessment
mark of 63% (6% + 56.7%) for the module.
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6.3 Getting the most out of your assignments

Since university studies are intended to teach you to learn to think, we

strongly recommend that you write down your reasoning for your answer to
each question on a separate sheet of paper. We make this suggestion
because a few weeks always elapse between submitting assignments and
receiving our answers and explanations, by which time you will have
forgotten why you gave a particular answer. So write your reasons down,
and as soon as you receive our explanation of the assignments, compare
your reasoning with ours. Doing this will enable you to get the most out of
your studies.

Do not mark any answers on the actual assignments. Keep your

assignment pages clean, or else make a photocopy of them before you
make any marks on them. Then, when you prepare for the examination, you
can work through the assignments again without having the correct
answers for each question in front of you.

And if you really want to study effectively, study the particular issues that
are covered by the assignment, and then answer all the questions without
going back to the prescribed book. You will then be answering the
questions under examination conditions, and that will be a real test of
whether or not you understand the tutorial matter.

6.4 Assignment department

Please forward your assignments to the Assignment Department and not

to the Department of Business Management. This will ensure that your
assignment is recorded. An assignment sent to the Department of Business
Management will be returned unmarked.

Please note that students using the Internet may use the myUnisa system
for despatching assignments to Unisa. To submit an assignment via

Go to
Log in with your student number and password.
Select the module from the orange bar.
Click on assignments in the left menu.
Click on the assignment number you want to submit.
Follow the instructions.
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For detailed information and requirements regarding assignments, see

My studies @ Unisa, included in your study package.

6.5 Multiple-choice questions

The examination at the end of the semester will consist only of multiple-
choice questions. There are no essay questions in the examination.

The multiple-choice questions are not marked negatively: in other words,

marks are not deducted for wrong answers. All questions carry equal

Shortly after the closing date of assignments, you will receive a computer
printout giving your answers, the correct answers, and your marks for the
assignment. Soon after that, you will also receive a tutorial letter with
detailed comments on each question, explaining why one particular option
was correct and why the other options were wrong.


We wish to urge you in the strongest possible terms that when you answer
multiple-choice questions, you write out your own reasoning for each option.
In other words, if you decide that the correct answer to a particular question
is option 3, you must then write down why you think option 3 is correct, and
why you think options 1, 2 and 4 are wrong. Write your reasons on a
separate sheet of paper and keep them for reference and comparison with
our reasons and explanations.

Do not send your written explanations to us. We will not be able

to mark them. They are only for your own use.

Compare your answers and reasoning with our explanations as soon as you
receive our explanations. Don't make the mistake of putting this off until just
before the examination.
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6.6 The use of the mark-reading sheet

When submitting assignments, you must send ONLY your mark-reading

sheet in an A4 envelope. Please do not include the cover sheet with your
mark-reading sheet.

NB: Only mark-reading sheets may be used to answer the

questions for assignments. You must ensure that
Unisa supplies you with enough mark-reading sheets.

Please DO NOT FOLD your mark-reading sheet. Always

send it in the A4 envelope provided for that purpose.

All students are issued with an assignment pad, and

some assignment cover sheets, regardless of the
number of subjects for which they have enrolled. You
do not need these pads or cover sheets for Business
Management I.

Answers on a sheet of paper cannot be marked by the

computer. Send only the mark-reading sheet in the A4
envelope to the Assignment Department.

Instructions on the use of mark-reading sheets for answering multiple-

choice questions are contained in the 2011 My studies @ Unisa. Read
these instructions CAREFULLY and make sure you follow them
STRICTLY to avoid making unnecessary mistakes.
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6.7 Faulty mark-reading sheets

Although you are given detailed instructions on how to complete

mark-reading sheets, each semester a number of students continue to
make one or more of the following mistakes:

The mark-reading sheet is torn or folded.

The bar-code sticker is stuck onto the mark-reading sheet.
Student numbers are completed incorrectly, or not entered at all.
The unique assignment number is not completed or is entered
The blocks are marked with ink instead of with an HB pencil.
The pencil marks extend across the edges of a block, or the line is
drawn under the block instead of inside it.
The pencil marks are drawn diagonally across the block, or a cross is
drawn, instead of a horizontal line.
A line is drawn through the unused part of the mark-reading sheet.
Please note: No other marks except your answers must be made on
the mark-reading sheet.
The mark-reading sheet is stapled to other papers.
Corrections are made with Tippex, or mistakes are erased in such a
way that a dark blotch is left. (That is why you should use only an HB

We wish to stress that in all these cases, the mark-reading sheet simply
cannot be processed by the computer, and in certain instances may even
damage the marking equipment.

Mark-reading sheets which are rejected by the computer will

be returned to students without being marked. In such
cases, the student will receive no marks for the assignment.
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6.8 Extension for the assignments

Under no circumstances will you be granted an extension to the

deadline for submitting your assignments.

If your assignments are late, they will be returned unmarked. You are
therefore strongly advised to post your assignment approximately 14 days
before the due date.

The due date is the date on which your assignment must reach
Unisa, not the date on which you must post it.


You will be informed in Tutorial Letter 301 MNALLE-Q/2011 of the time

and place of the discussion classes to be held in Pretoria, Durban and
Cape Town later on in the semester.


The following is a recommended time schedule which can be used as a

guideline for studying this module:


Reading of relevant chapters in the prescribed

book 40

Reading of study guide 10

Doing of activities in the study guide 10

Doing of the assignment 5

Studying of the prescribed book and study guide

and making of summaries 50

Final revision 5

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The module has a two-hour examination consisting only of multiple-choice

questions. Further details about the examination will be forwarded to you
at a later date.

The examination papers of previous years are not available, but

please note that the multiple-choice questions in the
examination are similar to those in the assignments.


If you have not received a tutorial letter, you should contact the Despatch
Department on (012) 429-4104 for a replacement of the missing tutorial
letter. The tutorial letters can also be downloaded and printed from the
myUnisa system.


If you experience any problems in your studies during the semester,

please do not hesitate to contact us in writing, by telephone, or in person
(by appointment).

We wish you everything of the best in your studies.


TELEPHONE NUMBER: (012) 429-4239
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Both Assignment 01 and 02 are compulsory.

Assign- First semester Second semester
number Due date Unique Due date Unique
number number

01 14 March 2011 845169 22 August 2011 707481

This assignment covers chapters 10 and 11 of the prescribed book.

This assignment consists of 20 multiple-choice questions. Use a mark-

reading sheet to answer and submit the assignment. You may also use the
myUnisa system to submit it.

You must submit this assignment in order to obtain entrance to
the examination!

Although the assignment consists of multiple-choice questions only, you

should note the different formats of the questions as you can expect similar
questions in the examination.
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1 For which of the following reasons is operations management

important in the enterprise?

a It can improve productivity

b It can help the enterprise to satisfy the needs of its clients
more effectively
c It can improve planning within the purchasing function
d It can be decisive for the general reputation of the

1 ab
2 bd
3 abd
4 bcd

2 An input in the transformation process of a furniture manufacturer


1 lounge and dining room suites.

2 selling furniture to wholesalers.
3 paper, cardboard and ink.
4 saw and planing equipment.
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3 Which of the following statements on operations management

strategies and objectives are correct?

a Customer/client requirements are often referred to as

competitive priorities
b The lead time should be lengthened
c High reliability emphasises the ability of the business to
meet specifications continuously in the short term
d Doing things better is closely connected with the concept
of TQM

1 abc
2 bcd
3 ad
4 bc

4 A dentist renders a service, where the service which is

provided is in nature.

1 professional; intangible and perishable

2 professional; tangible and durable
3 mass; intangible and durable
4 mass; tangible and perishable

5 Sappi, a paper manufacturer, uses a(n) operational process,

where the volume of outputs produced is and the variety of
outputs produced is ... .

1 mass; high; low

2 continuous; high; low
3 batch; low; high
4 batch; high; low
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6 Arrange the steps involved in the designing of products and

services in the correct order.

a Idea/concept generation
b Preliminary design
c Screening process
d Prototype design
e Evaluation and improvement

1 abcde
2 acbde
3 bacde
4 acbed

7 Which of the following statements concerning the basic layout

types in the design of operations processes are correct?

a The fixed position layout is used where the product cannot

be shifted on account of its size, shape or location
b The process layout is used where the different operations
are arranged in consecutive order
c The product layout is used where similar operations are
grouped together into sections
d The cellular layout is used where certain processes are
placed in a cell and the particular cell is then arranged
according to either a process or a product layout.

1 ad
2 bc
3 abd
4 acd
5 abcd
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8 Match the following services (in column A) with the three main
categories of operational processes (in column B) for service

Column A Column B
(Services) (Operational process)

(a) Deloitte and Touche (i) Service shop

management services
(b) ABSA banking services (ii) Professional services
(c) The Sheraton hotel in
(d) South African Airways (iii) Mass services
(e) Doctor John Doe,
medical practitioner

1 (a)(i); (b)(ii); (c)(iii); (d)(i); (e)(iii)

2 (a)(ii); (b)(i); (c)(ii); (d)(ii); (e)(ii)
3 (a)(ii); (b)(i); (c)(i); (d)(iii); (e)(ii)
4 (a)(iii); (b)(ii); (c)(i); (d)(ii); (e)(i)

9 Owing to high popularity, hotels charge tourists high rates during

the holiday. During the off-season periods hotels offer much
lower rates with the hope of attracting guests in order to fill up
their capacity. What type of capacity plan is used here to
accommodate variations in demand?

1 level capacity plan

2 chase-demand plan
3 demand management plan
4 production plan
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10 Which of the following failures are typical failures that occur in

operations processes?

a Facility failures
b Design failures
c Staff failures
d Customer/client failures

1 ab
2 ad
3 bcd
4 abcd


11 Computer Ltd has many applicants for the computer programming

post which they advertised in the local newspaper. Which of the
following are questions which the HR Manager should ask these
applicants during the preliminary screening phase of the selection

a How often has the applicant changed jobs?

b What type of jobs did the applicant hold in the past?
c How quickly did the applicant progress?
d Does the applicant comply with the minimum requirements
as given in the job specification?

1 ab
2 abc
3 bcd
4 abcd
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12 You are the human resources manager of KZB Computers which

is situated in Durban. You have decided to do your recruitment
for the position of a financial analyst by means of head-hunting.
This means that you will have to recruit by

1 placing an advertisement in the local newspaper.

2 visiting schools and universities to find prospective
3 placing an advertisement on the internet.
4 offering the job to someone whom the management of
KZB knows personally.

13 Tommy Thompson is the owner of a small bookshop consisting of

4 employees. His assistant has recently resigned and he needs to
appoint another assistant. What are the reasons for Tommy
appointing someone internally?

a Current employees are familiar with the business

b Current employees careers are advanced
c Current employees are suitably qualified
d Current employees can bring new ideas to the business

1 ab
2 abc
3 bcd
4 abcd

14 After Mary Mashego, an HR manager, has completed the

preliminary screening of applicants, she must do an intensive
assessment. This involves two steps, namely testing
and interviewing.

1 IQ; psychological
2 medical; shortlist
3 diagnostic; shortlist
4 psychological; diagnostic
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15 The receptionist was rated as very poor in terms of her

friendliness. In response she could argue that friendliness should
not be regarded as a performance criterion because it

1 is not relevant to a receptionists job.

2 is not measurable.
3 is not accepted by managers and employees as a
performance criteria.
4 does not distinguish between good and poor performers.

16 After Mr Peter Hetisani has been appointed as the new financial

analyst at KZB Computers, he has to go through a process of
induction. Which of the following activities should take place during
this induction programme?

a Mr Hetisani will be introduced to his colleagues

b Mr Hetisani will take part in psychological testing
c Mr Hetisani will take part in a diagnostic interview
d Mr Hetisani will be informed about payment procedures

1 ac
2 bcd
3 ad
4 abc

Read the following case study and answer questions 17 and 18.

Creative Graphics Ltd (CG Ltd) encountered many difficulties regarding

its human resources in 2010. Poppy was appointed as the new human
resources (HR) manager to help solve the problems and create a
harmonious working environment within the company.
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17 During human resource planning for CG Ltd, Poppy conducts

human resource forecasting. The purpose of this is to

1 balance the human resource supply and human resource

2 provide guidelines and steps indicating how the HR
requirements can be provided for.
3 emphasise the need for intensive training programmes
and campaigns.
4 ensure a sufficient number of applicants apply for
positions which may be needed.

18 Poppy decides to do an internal comparison to determine how

much a specific graphic designer should be paid by way of
compensation. Which one of the following statements best
illustrates this decision?

1 Poppy undertakes country-wide salary surveys to compare

salaries for graphic designers
2 Poppy compares the salaries of graphic designers at other
3 Poppy compares the value of the jobs at CG Ltd in terms
of the demands they make on the employee
4 Poppy compares the value of the jobs at other companies
in terms of the demands they make on the employee
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19 John has just been appointed as a cashier at a medical clinic.

The financial department of the clinic employs the following
people: five cashiers, two debtors clerks, three creditors clerks,
a supervisor for the cashiers, a supervisor for the debtors and
creditors clerks and an accountant who is also the financial

Identify the correct descriptions of job design methods that can

be used in Johns job.

1 To help his training, John works as a cashier for three

months, then as a debtors clerk for three months and a
creditors clerk for three months (job rotation). After a year,
John is the most senior cashier working there and he has to
act as cashier supervisor while his supervisor is on maternity
leave (job enlargement). After two years, John is promoted to
cashier supervisor (job enrichment).

2 To help his training, John works as a cashier for three

months, then as a debtors clerk for three months and a
creditors clerk for three months (job rotation). Another
cashier is on sick leave for a month and John has to do her
work as well as his own for that month (job enrichment). After
a year, John is the most senior cashier working there and he
has to act as cashier supervisor while his supervisor is on
maternity leave (job enlargement).

3 To help with his training, John works as a cashier for three

months, then as a debtors clerk for three months and a
creditors clerk for three months (job rotation). Another
cashier is on sick leave for a month and John has to do her
work as well as his own for that month (job enlargement).
After a year, John is the most senior cashier working there
and he has to act as cashier supervisor while his supervisor is
on maternity leave (job enrichment).
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4 After one year, John has to alternately work as supervisor of

the cashiers and supervisor of the debtors and creditors clerks
(job rotation). After two years, John is promoted to supervisor.
After six months of being a supervisor he has to supervise
both the cashiers and the debtors and creditors clerks while the
clerks supervisor is off sick for two months (job enlargement).
After two years, John is promoted to supervisor (job

20 Which two of the following statements refer to Maslows

hierarchy of needs?

a Maslows theory subscribes to a rigid hierarchy of needs

b The theory focuses on the three needs that explain
c The theory emphasises the task itself as the source of
job satisfaction
d The theory assumes that a specific need ceases to
motivate a person once it has been satisfied

1 bc
2 ab
3 bd
4 ad
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Assign- First semester Second semester

number Due date Unique Due date Unique
number number

02 11 April 2011 733083 12 September 859507


Assignment 02 covers chapters 12, 13 and 14 in the prescribed book.

This assignment consists of 30 multiple-choice questions. Use a mark-

reading sheet to answer and submit the assignment. You can also submit it
on the myUnisa system.

Assignment 02 is also a compulsory assignment


1 Nirvashni (a bride to be) sees an advertisement for traditional Indian

bridal wear. She excitedly tells her mother about the advertisement.
She however did not pay attention to the advertisement on burial
services that followed on the bridal wear advertisement. Nirvashni
has shown that plays an important role in customer behaviour.

1 motivation/need
2 attitude
3 perception
4 learning
5 personality
30 MNB1601/101

Read the following scenario and then answer questions 2 to 5 below:

Rebecca Molefe is the marketing manager of a large ladies clothing

enterprise called Fashion Wear. A new range of fashionable clothing has
just been designed and after market segmentation has been done,
Rebecca Molefe describes the selected/identified market segment at
which the clothes will be marketed as follows: unmarried, liberal women
between 18 and 28 years of age, with an income of more than R130 000
per year, and who live in the Western Cape. Rebecca and her marketing
team decide to sell the new range of clothing at a high price and to
distribute it through two outlets, namely Boutique 4U and Boutique

2 Which of the following segmentation criteria were used to identify

this market segment?

1 demographic, psychographic and behavioural

2 geographic, demographic and psychographic
3 demographic, behavioural and geographic
4 psychographic, geographic and behavioural

3 The new range of clothing can be classified as products.

1 shopping
2 convenience
3 range
4 speciality

4 Which type of pricing is Rebecca using?

1 Penetration pricing
2 Leader pricing
3 Skimming pricing
4 Bait pricing

5 Which type of market coverage has Rebecca chosen?

1 Intensive
2 Exclusive
3 Speciality
4 Selective
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6 Match the product concept in Column A with the correct

description/example in Column B.

Column A Column B

(a) Core product (i) The Rav4 has a three year

warranty and a motor plan for its
first 5 years

(b) Need-satisfying product (ii) A sports utility vehicle (SUV)

has four fitted tyres, a spare
tyre, a 2,4 litre engine and a
seating capacity for five people

(c) Product image (iii) Lexus cars are sold only at

exclusive dealerships and at a
price 30% higher than the

(d) Formal product (iv) The Mitsubishi Pajero has a

specific identity

1 (a)(iii) (b)(i) (c)(iv) (d)(ii)

2 (a)(ii) (b)(i) (c)(iii) (d)(iv)
3 (a)(iv) (b)(ii) (c)(i) (d)(iii)
4 (a)(i) (b)(iv) (c)(ii) (d)(iii)
32 MNB1601/101

7 The marketing team of Toyota South Africa is in the process of

developing a new affordable electric two-seater vehicle. The idea for
the new vehicle has been developed and screened to determine its
viability from a marketing and financial point of view. Unprofitable
product ideas have also been eliminated. The next step in the new
product development process would be to ...

1 develop a prototype of the new electric two-seater vehicle.

2 develop a marketing strategy for the electric two-seater
3 test the markets reaction to the new electric two-seater
vehicle in the Johannesburg area.
4 introduce the new electric two-seater vehicle to the market.
5 develop a promotional campaign for the new electric two-
seater vehicle.

Read the following scenario and then answer questions 8 to 10 below.

After Dannys car breaks down for the third time, he decides to purchase a
new car. He remembers that his friend Susan had a bad experience with
her Fiat and, after visiting various dealers, he decides to rather settle for a
Toyota or a Volkswagen. He compares all the information that he collected
about the Toyota Yaris and the Volkswagen Polo and decides to purchase
the Toyota Yaris. Once he has bought his new car he wonders whether he
has made the right choice, but after seeing all the new advertisements
about the features of the Yaris, he is reassured that he has made the
correct decision.

8 When Danny remembers Susans bad experience with her Fiat, this
refers to

1 awareness of an unsatisfied need.

2 evaluating the possible solutions.
3 gathering information.
4 deciding on a course of action.
33 MNB1601/101

9 Dannys visits to the car dealers refer to , while his comparison

of all the information refers to

1 evaluating the possible solutions; deciding on a course of

2 post-purchase evaluation; gathering information.
3 awareness of an unsatisfied need; post-purchase evaluation.
4 gathering information; evaluating the possible solutions.

10 The advertisements that reassure Danny are directed at him in

phase of the consumer decision making process.

1 two
2 three
3 four
4 five
34 MNB1601/101


11 Calculate the Net Present Value of the following cash flow amounts
received at the end of each year, given an interest rate of 10%.

Year Cash Flow

1 R3 000
2 R2 000
3 R5 000

Future value factors

Period (n) 5% 10% 15%
1 1.0500 1.100 1.1500
2 1.1025 1.2100 1.3225
3 1.1576 1.3310 1.5209
4 1.2155 1.4641 1.7490
5 1.2763 1.6105 2.0114

Discounting factors
Period (n) 5% 10% 15%
1 0.9524 0.9091 0.8696
2 0.9070 0.8264 0.7561
3 0.8638 0.7513 0.6575
4 0.8227 0.6830 0.5718
5 0.7835 0.6209 0.4975

1 R469
2 R1 469
3 R8 136
4 R9 000

12 Madiba Ltd borrowed a certain amount of capital at an interest rate

of 11% per annum from Absa bank. Assuming a tax rate of 40%,
what will Madiba Ltds after-tax cost of debt be?

1 7,8 %
2 6,6%
3 5,1%
4 11,25%
35 MNB1601/101

Study the information below and answer question 13.

Samrung Ltd has the following book values for its capital structure:

Capital components
Owners equity R500 000
10% preference shares R200 000
Long-term debt R400 000
[10% debentures]

The after-tax cost of debt is 7%

The cost of owners equity is 15% and the cost of debentures is

before tax

13 Based on the information on Samrung Ltd above, the weighted

average cost of capital (WACC) is

1 11,07%
2 18%
3 7%
4 4,05%

Read the scenario and answer questions 14 and 15 below.

K-ZEE Ltd, a local manufacturer of a South African soccer team kit,

estimated that the fixed cost per year amounts to R150 000.
The variable cost per jersey is R250.00.

14 If each jersey sells for R450.00, how many jerseys must K-ZEE Ltd
sell to break even?

1 900
2 725
3 750
4 800
36 MNB1601/101

15 How much profit will K-ZEE Ltd make if they sell 1000 jerseys?

1 R100 000
2 R 50 000
3 R150 000
4 R200 000

Use the following information to answer questions 16, 17 and 18 below:

The following balances are reflected in Success Ltds financial statements

at the end of their financial year.

Cash R123 800

Accounts receivable R746 200
Inventory R250 000
Current liabilities R747 700
Net fixed assets R1 695 000

16 What is the net working capital of Success Ltd?

1 R122 300
2 R372 300
3 R575 000
4 R747 700

17 The current ratio of Success Ltd is equal to

1 1,30:1
2 1,40:1
3 1,50:1
4 1,60:1

18 The acid test ratio of Success Ltd is equal to

1 1,17
2 1,16
3 1,15
4 1,14
37 MNB1601/101

Study the graph below and then answer questions 19 and 20.



300 a




19 In the above graph, (a) represents and (b) represents

1 total fixed cost; total variable cost.

2 total variable cost; total fixed cost.
3 total cost; total fixed cost.
4 total fixed cost; total cost.

20 What amount in the graph constitutes total fixed cost?

1 R200
2 R300
3 R500
4 R600
38 MNB1601/101


21 Suppose you are the new purchasing and supply manager of Distell.
You are requested by top management to write a procedures
manual, including an outline of the activities of purchasing and
supply management. Which of the following activities should be
described in your document?

a Select suppliers
b Advertise products to customers
c Expedite and receive materials
d Control of warehouses and inventory

1 a
2 bc
3 abc
4 acd

Study the following scenario and then answer questions 22 to 24:

Swisschoc is a Swiss chocolate manufacturing company that was started

ten years ago by a South African who got his training in Switzerland at a
chocolate academy. He started his business with 10 people, but extended
his operations and he currently employs 450 people of which six are
purchasing personnel.

Swisschoc targets mainly the upper-middle class South African. However,

Swisschoc export 25% of their production to England. Swisschoc purchase
most of the raw materials (sugar and fat) locally, but the cocoa is imported
from South America and some of the packaging material from Europe.
Swisschocs plant is situated in Gauteng. They sell some of their products
through large chains such as Woolworths and smaller upper class food
speciality stores.

Swisschoc manufactures a standard range of chocolates in a variety of

packaging. The market for this standard range is quite stable. However,
there are seasonable upswings during Valentines Day, Easter and
Christmas. For these periods, besides their standard range and reliable
transporters, Swisschocs clients require special lines, unique products and
unique packaging. The planning for these special product lines requires
close cooperation between the marketing, operations and purchasing
39 MNB1601/101

22 Which one of the following statements is correct?

1 Price, quality and delivery are equally important in the

purchasing of the raw materials
2 The purchasing of the sugar and cocoa is equally important
3 The quality of the raw materials is more important than the
price of these materials
4 The quality of the content of the final product is more
important than the packaging material

23 The inventory control method most likely to be used by Swisschoc

for the control of sugar is

1 the cyclical system.

2 the just-in-time system.
3 the efficient consumer response system.
4 the fixed order quantity system.

24 Swisschoc incurs a number of different inventory costs. The

opportunity costs, insurance costs and depreciation of inventory are
examples of

1 inventory carrying costs.

2 administrative costs.
3 inventory ordering costs.
4 inventory ordering shortage costs.

25 The purchasing and supply cycle must be done in sequential order.

Which of the following combinations is the correct sequential order?

a Handling errors and discrepancies

b Selecting suppliers
c Receiving, inspecting and distributing
d Following up and expediting

1 adcb
2 bdca
3 cadb
4 dcba
40 MNB1601/101

26 Peter was recently appointed on a tactical management level at

BMW in the purchasing department. What do his duties entail?

1 Negotiation, human resources development, contracting

and interface development
2 Negotiation, supplier alliances, expediting and total quality
3 Human resources development, long-term planning,
negotiation and pricing
4 Contracting, returns and recycling, policy formulation and

27 When Telkom head office negotiates large contracts with suppliers

of copper cable and decentralised regional offices buy non-
strategic items such as tools from local suppliers, they are using
a purchasing and supply structure.

1 centralised
2 combination of centralisation and control
3 combination of centralisation and decentralisation
4 decentralised

28 What is/are the disadvantage(s) of a company keeping too little


a Higher unit prices as a result of smaller orders

b Operating capital being tied up with the resultant opportunity
and interest costs
c More urgent orders with concomitant higher-order and
transport costs, and strained relations with suppliers

1 ac
2 ab
3 abc
4 only a
5 only b
41 MNB1601/101

29 Dairy Belle Cheese & Butter Ltd uses the just-in-time system.
Which one of the following would be most valuable to them while
they are in the process of investigating possible suppliers?

1 Quoted price
2 Technical capability
3 Timeous delivery
4 General reputation

30 Match the steps in the purchasing cycle (in column A) with the
appropriate document (in column B) required for the step.

Column A Column B
(Steps) (Documents)

(a) Development and description of need (i) Cheque

(b) Issuing the order (ii) Requisition
(c) Paying for the order (iii) Specifications
(d) Closing the order (iv) Proof of receipt

1 (a)(i); (b)(ii); (c)(iii); (d)(iv)

2 (a)(iv); (b)(i); (c)(ii); (d)(iii)
3 (a)(iii); (b)(ii); (c)(i); (d)(iv)
4 (a)(ii); (b)(iii); (c)(iv); (d)(i)