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rESr coDE 02233010
MAY/JUNE 20I2
FORM TP 2012227
CARIBBEAN EXAMINATIONS COUNCIL
ADVANCED PROFICIENCY EXAMINATION
MANAGEMENT OF BUSINESS
Unit2-PaPer0l
90 minutes

24 MAY 2012 (a.m.)

READTHEFoLLowtNGINSTRUCTIoNSCAREFULLY.
them'
l. This test consists of 45 items. You will have 90 minutes to answer

2. In addition to this test booklet, you should have an answer sheet'

Do not be concerned that the answer sheet provides spaces
for more answers than there are
3.
items in this test.
(A), (B), (C). (D)' Read each item
4. Each item in this test has four suggested answers lettered
you are about to answer and decide which choice is best'
to your item and shade the space
5. On your answer sheet, find the number which corresponds
at the sample item below'
having the same letter as the answer you have chosen' Look

Sample ltem
union'l
Which of the following actions CANNOT be taken by a trade
Sample Answer
(A)
@@o o
Picket
(B) Strike
(C) Go slow
(D) Lock out

(D) has been shaded'

The best answer to this item is "Lock out", so answer space

be sure to erase it completely before you fill in your new

6. lf you want to change your answer.
choice.
quickly and as carefully as you can'
7. when you are told to begin, turn the page and work as
Your score will be the total
If you cannot answer unT,.t, omit it and go on to the next one'
number of correct answers.
8. You may do any rough work in this booklet
- 9. You may use silent non-programmable calculators to
answer questions'
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- Copyright O 2009 Caribbean Examinations Council
- All riohts reserved
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l. Which of the fbllowing methods of 6. A technique used to aid managers in rnaking

production is used MAINLY on assembly choices in conditions of uncertainty is called
lines'/ a

(A) Job (A) decision tree

(B) Flow (B) structured decision
(c) Batch (c) critical path analysis
(D) Assembly (D) project evaluation and review

2. The term 'kaizen'or 'kauzen' ret'ers to 7. Wlrich of the following is the LEAST likely
etfect of high levels of competition on a

(A) quality circles producer'l

(B) quality assurance
(C) a decline in production (A) Increased labour costs
(D) continuous imProvement (B) Reduced operating costs
(C) Increased marketing costs
(D) Reducedtechnologicalupgrades
3. Labour tumover may be BEST defined as the

(A) recruitment and selection of 8. Which of the tbllowing are advantages of a

workers Just-irr-Time Production System'?

(B) number of workers who enter the
firm I. Better work flow
(C) rate of redundancY in the IL Reduced inventory and set-up time
organization lll. Quick responses to changes in
(D) rate at which workers enter and demand
leave an organization
(A) I and ll only
(B) I and lll only
4. The ternt 'modularisation'refers to the (C) ll and lll only
(D) I, Il and lll
(A) last stage of product development
(B) sharing of common data and
processes
(C) designing of products in sections
and components
(D) small-scale Production of
mechanical and electronic devices

Selecting the BEST practice or performance

against which the organization's perfbnnance
is compared is known as

(A) outsourcing
(B) benchmarking
(C) 'continuous inrProvement
(D) total qualitY management

^^ rr rn'rt tC r\IC\1T DAnfj

9. Which ol'the tbllowing diagrams indicates t0. Which of the tbllowing layouts is MOST
that there rnight be NO cause-eftect suitable fbr the printing of primary school
relatiorrship betrveen x and Y'? textbooks'J
v
(A) (A) Process
(B) Cellular
(C) Prodr.rction
(D) Fixed position

Item ll refers to the diagram below.

(B)

(c) I
I

ll. Which of the following Processes ts

represented in the diagram above?

(A) Kaizer
(B) Consulting
(c) Outsourcing
yi (D) Benchmarking
(D)

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Item 12 refers to the network diagram below.

)-F
I

I
\

t2. The broken line on the network diagram represents a

(A) tail
(B) head
(C) node
(D) dummy

13. The Riverside Resort and Spa is considering purchasing a bus. The miles driven by the bus over
the past 6 years are as follows:

Year Mileagc
I 2 000
2 3 000
3 3 800
4 3 200
5 2 500
6 I 800

The forecast mileage for year 7, using a2-year moving average, is

(A) I 800
(B) 2 000
(c) 2 lso
(D) 4 300

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Items l4 - l5 refer to the following diagram'

Level
of
Stock

J: Time

15. Which of the following represents the

14. Which of the following represents the buffer
re-order level?
stock?

(A) t
(A) I (B) II
(B) II (c) III
(c) III (D) lv
(D) lv

Which of the following refers to data 17. Which of the following statements
16.
describes a characteristic of Just-in-Time
collected for some PurPose, other than the
stock control?
MAIN purpose?

(A) SurveY
(A) Buffer stocks are held to ensure
on
(B) Primary Production can still take Place
tirne.
(C) Internet
(B) SPace is needed for the storage
(D) Secondary
of stocks of raw materials'
comPonents and finished goods'
(C) Greater flexibility in the system
leads to quicker response time to
changes in demand'
(D) lt is not the preferred method of
stock control because of high
costs of stockholding'

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18. Which of the tollorving is NOT a 23. Which of the following featur.es are
characteristic of a service'l LIKELY to influence- the choice of a
distribution channel'J
(A) Uniformity
(B) lntangibility l. Access to a firnr's product
(C) Perishability II. Cost savings
(D) lnseparability lll. Recognition of a firm's product
lV. Wide market coverage

t9. Which of the fbllorving terms BEST (A) l. II and III only
describes the FIRST stage of the new (B) l, ll and IV only
product development process'? (C) l. III and IV only
(D) Il, III and lV onlv
(A) Concept testing
(B) ldea generation
(C) ldea screening 24. Which of the tbllorving pricing methods
(D) Business analysis uses the buyer's point of view regarding
the worth of the product?

20. The collection of businesses and products (A) Cost-plus

that make up the company is known as (B) Going-rate
(c) Break-even
(A) strategic analyses (D) Value-based
(B) portfolio analyses
(C) business portfolios
(D) strategicobjectives 25. The salespersons of Perfumes palace do
door-to-door promotional presentations to
prospective buyers. They are engaged in
21. Which of the follorving BEST describes
the order of the stages in the tif'e cycle of a
product?
(A) publicity
(B) advertising
(A) Introduction. growth. saturation,
(C) personal selling
maturity, decline
(D) sales promotion
(B) Introduction. maturity. growth.
saturation. decline
26. Megastar Ltd displays samples of muflins
(C) lntroduction. growth, maturity,
near the deli counter for shoppers to taste.
saturation. decline
This is an example of
(D) Introduction. saturation. growth.
maturity. decline
(A) creative selling
(B) sales promotion
22. Mr Brown is planning to introduce a
(C) personal selling
new line of clothing using a high pricing ( D) event promotion
strategy. Mr Brown's pricing strategy is
rel'erred to as

(A) price skirnnring

(B) perceived value
(c) cost-plus pricing
(D) penetration pricing
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27. All by a number

businesses are aflected Item 30 refers to the diagram belorv.
ot'tbrces in the environment. Which of
the tbllowing are fbrces in the micro-
environment?

l. Customers
Il. Covernment PRODUCT

lll. Competitors

(A) I and Il only

(B) I and lll only
(Cl1 ll and lll only PROMOTION
(D) l. Il and lll only

28. Peter. a producer, is planning to introduce

a new product in the shortest time. He
is having financial difficulties and needs 30. What type of model is shown in the
to know if consumers will purchase the diagram'l
product.
(A) Sales
Peter sends some of his employees to the (B) Channel
shopping mall to interview shoppers. What (C) Supplies
sampling technique is Peter using? (D) Marketing

(A) Cluster
(B) Stratified 31. Which of the following is a primary
(C) Judgement advantage of small business to the
(D) Convenience Caribbean region?

(A) Creating ernployment

29. In addition to selling furniture, Delmar's (B) Serving niche markets
Furniture Ltd oflers delivery installation (c) lmproved standard of living
and repair services. warranties. showrooms (D) Inrproved management training
and rvaiting areas. What type of product is
Delmar's Furniture Ltd offering?
32. Which of the following is NOT a
(A) Augmented characteristic of a successfu I entrepreneur'l
(B) Hybrid
(C) Actual (A) High energy level
(D) Core (B) Fear of the unknown
(c) Tolerance for ambiguity
(D) Internal locus of control

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33. Penetration pricing refers to the process of 37. One objective of a cornpany's public
relations strategy is to
(A) adding a percentage of profits to
the total cost (A) present the public with details of
(B) following the pricing strategies of the company's financial records
the market leader (B) provides samples of the company's
(c) charging more than competitors for product
a status product (c) promote the corporate image of the
(D) reducing the price of a product to company
attract customers (D) distract the public from its operation

34. The term which BEST describes the set of 38. In the case of a clothing manut'acturing
all product lines and items that a particular company, direct cost would include the cost
seller offers for sale is product of
(A) mix (A) rental
(B) choice (B) telephone
(c) sample (c) electricity
(D) assortment (D) raw materials

35. Niche marketing may be BEST defined as 39. ONE advantage of focus group research is
the process of that it

(A) targeting the entire market (A) is based on small samples

(B) tailoring products to individual (B) provides insight about consumers
consumers (C) tends to suffer from interview bias
(c) exploiting a segment of a larger (D) is based on non-probability samples
market
(D) selling different products to each
consumer 40. At rvhich stage of the product lit'e cycle
does a product experience rapid market
acceptance and increasing profits'l
36. A benefit of e-commerce to the entrepreneur
is (A) Crowth
(B) Maturity
(A) access to a larger market (C) Introduction
(B) higher levels of profitability (D) Product development
(c) reduction in production costs
(D) improvement in product quality
41. A 'patent' can be considered a strategic
asset to a business because it

(A) protects innovative new products

(B) advertises innovative new products
(c) allorvs other businesses to copy
innovative nerv products
(D) reduces the cost of innovative new
products

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42. Which of the following documents of a 43. Delectable Treats Ltd, a small bakery,
'start-up'businesswouldbeofCREATEST sells its products through its own retail
interest to a commercial bank? outlet. Which of the following distribution
channels is Delectable Treats using?
(A) Balance Sheet
(B) CeneralJournal (A) Agent
(C) Income Statement (B) Direct
(D) Cash flow Statement (C) Indirect
(D) Multiple

Item 44 refers to the following chart.

(I) Lack of ([I) Lack of

sufllcient ' technical and
finance managerial skills

(II) Lack of
Lack of
, access.to

knowledge
(IV) E-commerce

44. Which of the problems above are MOST likely to prevent a small business from expanding?

(A) I and II only

(B) I and IV only
(C) II and III only
(D) II and IV only

Item 45 refers to the following scenario.

Shelly wants to establish her own mini-mart. However, she is undecided as to whether
to start her
own.or purchase an existing one.

45. One risk that Shelly may encounter if she purchases an existing mini-mart
is

(A) shorter start-up time

(B) poor reputation of the business
(C) the need to register the business
( D) existing structure for the business

END OF TEST

TF VOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

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