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    The Marketing Director of RVC, a company that uses batch production to manufacture soap and shampoo, has reviewed sales data for one of their soap brands. Last year, sales were 80,000 units per week. The Director wants to know the current profit level and margin of safety in order to decide whether to pursue a new packaging strategy or target new markets to extend the brand. Students are asked to define margin of safety, calculate the weekly profit based on provided data, and explain two benefits and two limitations of RVC's use of batch production.

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    The Marketing Director of RVC, a company that uses batch production to manufacture soap and shampoo, has reviewed sales data for one of their soap brands. Last year, sales were 80,000 units per week. The Director wants to know the current profit level and margin of safety in order to decide whether to pursue a new packaging strategy or target new markets to extend the brand. Students are asked to define margin of safety, calculate the weekly profit based on provided data, and explain two benefits and two limitations of RVC's use of batch production.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    17 views2 pages

    Business CT2 - Operations 9 Ig PDF

    Uploaded by

    DR
    The Marketing Director of RVC, a company that uses batch production to manufacture soap and shampoo, has reviewed sales data for one of their soap brands. Last year, sales were 80,000 units per week. The Director wants to know the current profit level and margin of safety in order to decide whether to pursue a new packaging strategy or target new markets to extend the brand. Students are asked to define margin of safety, calculate the weekly profit based on provided data, and explain two benefits and two limitations of RVC's use of batch production.

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    of 2

    CLASS TEST 2 Date: …………………………..

    Name: …………………………………………………… Marks: 15


    Grade: 9 IGCSE (A) Unit: Marketing Subject: Business Studies

    1 RVC uses batch production to manufacture a large range of products including


    soap and shampoo. Many of the products are at different stages of the product life
    cycle. The Marketing Director has been reviewing some data for one brand of
    soap, as shown in Table 2.1. She said: ‘Last year sales were 80 000 units a week.
    I want to know the current level of profit and margin of safety.’ The Marketing
    Director has to decide on a suitable extension strategy. The choice is between
    new packaging or targeting new markets.

    a) Define ‘margin of safety’.


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    b) Using Table, calculate the weekly profit. Show your working.
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    c) Explain two benefits and two limitations to RVC of using batch production.
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    …………………………………………………………………………………………[10]

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