A '=-=.

--\ -
I
'l
'i
;

f anrtx snal srnn I

%
FORMTP2010223
TESTCODE O2233OIO
MAY/JLTNE20IO

CARIBBEAN EXAMINATIONS COUNCIL

ADVANCED PROFICIENCY EXAMINATION
MANAGEMENT OF BUSINESS
Unit2-PaPer0l
90 minutes

25 MAY 2010 (a.m.)

READTHEFoLLowINGINSTRUCTIONSCAREFULLY.
them.
l. This test consists of45 items. You will have 90 minutes to answer

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

3. Eachiteminthistesthasfoursuggestedanswerslettered(A),(B),(C),(D).Readeachitemyou
are about to answer and decide which choice is best'
space having
4. on your answer sheet, find the number which corresponds to your item and shade the
the sample item belorv'
the same letter as the answer you have chosen. Look at

Sampleltem

which one ofthe following actions GANNOTbe takenby atrade union? E

SampleAnswer E
(t
l.-l
t-l (A)
F

I Nl
I pl
l'-l (B)
Picket
Stike @@@ o -
tl (C) GoSlow
(D) Lockout
+
space (D) has been shaded'
The best answer to this item is "Lock out", so answer
you fill in your new choice'
5. If you want to cha4ge your answer, erase it completely before
and as calefully as vou can' Ifyou
6. when you are told to begin, turn the page and work as quickly
cannotansweranitem,omititandgoontothenextone. Youmayreturntotheoicitteditemlater'
Your score will be the total number of correct answers'
.
7. Youmaydoanyroughworkinthisbooklet'
S.Youmayusesilentnon-programmablecalculatorstoanswerquestions.

Copyright @ 2009 Caribbean Examinations Council'@

- All rights reserved'
naiaafrlftl/-
tr//111t ttr/\ ADf ..|iri''r
nrEZUlv
-
-

f lrrlxscat-l{ERE t
-
 r.rl
"?'. I

-2-
1 . Which of the following is a disadvantage of 5. The practice of selecting the best practice or
jobproduction? performance against which the organisation's
performance is compared is known as
(A) Workers tend to be less motivated
because of repetition of work. (A) outsourcing
(B) Labour costs are high because (B) benchmarking
production tends to be labour (C) continuous improvement
mtenslve. (D) total quality management
(C) It is not possible to offer a wide
variety of goods to meet
consumers' needs. 6. Which of the forecasting techniques uses a
(D) There is a large stock ofunfinished group process that allows experts to make
goods at each stage oftheprocess. forecasts?

(A) Delphimethod
2. Labourproductivity is measured using (B) Consumer surveys
(C) Sales force composite
(D) Least square regression
output
(A)
capital employed
7. By introducing a new design in an effort to
output make a product more efficient while
(B) maintaining or increasing consumer appeal, a
capital + labour + materials
manufacturer is actually adding

output (A) cost

/^\
(c) value
."ptt"l + labour + -ut"riuls + rul". t:)
(C) viability
(D) competition

(D)
employees worked 8. which of the following is the MOST
appropriate method for measuring efficiency
ofproduction in a capital-intensive industry?

3. Which ofthe following methods ofproduction (A) Sales per employee

is MAINLy used on assemblv lines? (B) Profit per employee
(C) Output permachine
(A) Job (D) OutPut Per emPloYee
(B) Flow
(C) Batch
(D) Assembly

4. Which of the following is NOT a control

strategy in production?

(A) Design control

(B) Quality control
(C) Materials control
(D) Employee control

GO ON TO THE NEXT PAGE

I'J
| '+

11. When the process for producing a product is

9. Which ofttre following diagrams indicates that
there might be NO cause-effect relationship or ganized,thi s BEST avoids
between x and Y?
(A) bottle-necks taking Place
(A) (B) having to PaY for overtime
(C) workers being late for work
(D) excessive force from managem

I 12. Which of the following are advantages of a

I Just-in-Time Production sYstem?

I. Better work flow

(B) II. Reduced inventory and set-uP time
III. Efficient delivery of Products
IV. Quick responses to changes in
demand

(A) I and II
(B) I, II and III
(c) I, II and IV
(D) I. III and IV
(c)

13. The Riverside Resort and Spa is considering

the purchase of a new bus. The miles driven
by the bus over the past 6 years are as follows

Year 1 Mileage
I 2 000
2 3 000
(D) J 3 800
4 3200
5 2500
6 I 800

The forecasted milage for year 7 using a

2year moving average, is

10. Which of the following is the LEAST likely

(A) I 800

effect of high levels of competition on a (B) 2 000

producer?
(c) 2rs0
(D) 4 300

(A) Increased labour costs

(B) Reduced oPerating cost
(C) Increased marketing costs
(D) Reducedtechnologicalupgrades

GO ON TO THE NEXT PAGE

 t-
Items 14 - 15 refer to the following diagram of a basic stock control chart.

+- III Maximum
stock level

o +IV
xI
(t

Minimum
stock level

Time (Months)

14. Which of the following represents the re- 15. Which ofthe following represents 'lead time'?
order level?
(A) I
(A) I (B) il
(B) II (c) III
(c) III (D) IV
(D) IV

16. Which of the following is NOT a pricing 18. Which of the following is NOT a
strategy? characteristic of a service?

(A) Price skimming (A) Uniformity

(B) Penetration pricing (B) Intangibility
(C) Conhibution pricing (c) Perishability
(D) Distributionbasedpricing (D) Inseparability

77. Observations, experiments, focus groups and 19. Consumer buying behaviour refers to the
surveys are all examples of
(A) target market buying
(A) desk research (B) market segment buying
(B) test marketing (c) business buying behaviour
(C) primary research (D) buying behaviour of final customers
(D) secondary research

GO ON TO THE NEXT PAGE

A.\a'r1n1n /- A nn.nl n
1

-5-

20. ABC Co. Ltd decides to use advertising, 24. The pricing rnethod that uses the buyer's point
personal selling and sales promotion to infonn of view regarding the worth of product is
customers about the company's product. called
These techniques can be BEST described as
(A) value-based Pricing
(A) marketingmix (B) break-even Pricing
(B) promotionalmix (C) going-rate Pricing
(C) marketing channels (D) cost-plus Pricing
(D) direct advertising mix

25. Games and Things has launched the latest

21. Which of the following BEST describes the video game. To which of the following
stages in the life cycle of a product? segments does this offer aPPeal?

(A) Introduction,growth,saturation, (A) Benefit

manritY,decline (B) Individual
(B) Introduction,maturitY,growth, (C) Behavioural
saturation, decline (D) Age and life-cYcle
(C) Introduction,growth,maturitY,
saturation, decline
(D) Introduction,saturation'growth, 26. Alton is doing research on the factors and
maturitY, decline forces that affect the marketing manager's
ability to build and maintain successful
,, ,,
relationships with target customers- What
Mr Brown is planning to introduce a new line
type of environment is Alton researching?
a high pricing strategy' Mr
of clothing using
Brown's pricing strategy is referred to as
(A) Global
(B) Marketing
(A) price skimming (C) Target markets
(B) perceived value (D) StrategicPlanning
(C) cost Plus Pricing
(D) penerationPricing
27. The Salespersons of Perfume Palace do
Which of the following types of pricing door-to-door promotional presentations to
23.
prospective buyers. They are engaged in
objective focuses on covering variable costs
and some fixed costs?
(A) publicttY

(A) CunentPricingmaximization
(B) advertising

(B) Product qualitY leadershiP

(C) sales Promotion

(C) Market share leadershiP

(D) personal selling

(D) Survival

GO ON TO THE NEXT PAGE

o22330r0lcAPE2010
 6-
28. A division of Medic Care has a CT Scanner 32. A government-funded scheme which
to marketto hospitals. Which ofthe followine guarantees the repayment of a bank loan
techniques would be MOST appropriate?
should a business fail is referred to as

(A) Advertising (A) an insurance scheme

(B) Word of mouth (B) a loan guarantee scheme
(C) Personal selling (C) a capital investment scheme
(D) Sales promotions (D) a loan and share capital scheme

29. In addition to selling furniture, Delmar's 33. Which ofthe following is aprimary adv antage
Furniture Ltd offers delivery installation and
of small business to the Caribbean region?
repair services, warranties, showrooms and
waiting areas. What type of product is (A) Creating employment
Delmar's Furniture Ltd offerins? (B) Serving niche markets
(C) Improved standard of livins
(A) Core (D) Improved management truilning
(B) Hybrid
(c) Actual
(D) Augmented 34. Which of the following is a macro_
environmental factor affecting small
business?
30. Peter, a producer, is planning to introduce a
new product in the shortest time. He is having
(A) Record keeping
financial difficulties and needs to know if (B) Working capital
consumers will purchase the product.
(C) Management skills
(D) Governmentrezulations
Peter sends some of his employees to the
shopping mall to interview shoppers. What
sampling plan is Peter using? 35. Niche Marketing may be BEST defined as
the process of
(A) Convenience
(B) Judgement (A) targeting the entire market
(C) Stratified (B) tailoring products to individual
(D) cluster consumers
(C) exploiting a segment of a larger
market
31. John, a small business operator, is organising (D) selling different products to each
his financial records. In recording transactioni
consumer
the accounts of his creditors are placed in
the
36. The Intellectual Property Rights provision
(A) cash book that covers areas relating to musical pieces
(B) sales ledger and technical drawing is called
(c) general ledger
(D) purchases ledger (A) patents
(B) copyright
(C) trademarks
(D) industrial design

GO ON TO THE NEXT PAGE

02233010/C.APE2010

/
 .1, .,'
t, I I

37. A 'patent' cau be considered a strategic 42. John is the supervisor of a bank in a
asset to a business because it Caribbean teritory. He decides to leave the
bank and start a small business in a
(A) protects innovative new products neighbouring city. Which of the following
(B) adverlises innovative new products documents would he need to present to the
(C) allows other businesses to copy bank to receive a loan?
innovative new products
(D) reduces the cost of innovative new (A) Prospectus
products (B) Business Plan
(C) Organisational Chart
(D) Memorandum ofAssociation
38. In the case of arepair shop, direct costwould
include the cost of
43. Mrs West adds a 30% mark-up to the cost of
(A) rental items purchased for sale. What is the cost of
(B) electricity an item if its selling price is $ 156.00?
(C) telephone
(D) raw materials (A) $ 46.80
(B) $1oe.2o
(c) $120.00
39. When service providers try to add 'tangibles' (D) $202.80
to their services offered, they are usually
trying to overcome customers' fears and
44. Delectable Treats Ltd., a small bakery sells
difficulties. Which of the followingMAJOR
their products through their own retail outlet.
characteristics of service is emphasized?
Which ofthe following marketing channels is
Delectable Treats using?
(A) Variability
(B) Intangrbility
(C) Perishability
(A) Distribution channel
(D) Inseparability
(B) Agent/broker channel
(C) Direct marketing channel
(D) Indirect marketing channel
40. At which stage of the product life cycle does
a product experience rapid market Item 45 refers to the following scenario.
acceptance and increasing profits?

Shelly has recently acquired an inheritance.

(A) Growth
She has always wanted to establish her own
(B) Maturiqr
mini-mart and finally has the necessary
(C) Introduction
finances. However, she is undecided as to
(D) Product development
whether to start her own or purchase an
existing one which is for sale in her town.
4t. One advantage of electronic commerce is
that it 45. One risk that Shelly might encounter in
purchasing an existing business is
(A) reduces production time
(B) provides access to new markets (A) shorter start-up time
(C) increases printing and mailing costs (B) poor reputation of the business
(D) limits the number of potential (C) the need to register the business
consumers (D) existing structure for the business I
IFYOU FINISH BEFORE TIME IS CALLED, CHECKYOURWORKON THIS TEST.

02233010/CME2010