EE Economics and Business Educators New South Wales 2017 TRIAL HIGHER SCHOOL CERTIFICATE EXAMINATION Business Studies Student number/name: General Instructions Total marks ~ 100 Section | + Reading time - 5 minutes. 20 marks + Working time — 3 hours. * Attempt Questions 1-20 + Write using black pen. * Allow about 35 minutes for this section + Draw diagrams using pencil + NESA-approved calculators may Section It be used. 40 marks + Write your name/student number on * Attempt Questions 21-24 this page, on all pages you write on * Allow about 1 hour and 15 minutes for this and on the front of each writing section booklet. Section Ill 20 marks * Attempt Question 25 = Allow about 35 minutes for this section Section IV 20 marks + Attempt either Question 26 or Question 27 * Allow about 36 minutes for this section Disclaimer: very efor has baen made to prepare this Trial Higher Schoc! Certificate examination andthe marking guidelines in accordance with the NSW Education Standards Authority examination guidelines and principles. Howavee Economies and Business Educators NSW aeceptsno responsi forthe ‘ecuracy and usefulness ofthis examination, Indu echool have the inal onu® of responsiblity for use ofthis examination as an atsessment takSection | 20 marks Attempt Questions 1-20 Allow about 36 minutes for this section Use the multiple choice answer sheet provided. Select the altemative A, B, C, or D that best answers the question. Fill in the response space completely. Sample 2+2= (A)2 (B)4 (c)6 (D)8 AO B® ce DO I you think you have made a mistake, put a cross through the incorrect answer and fil in the new answer. 1@ 5a co DS If you have changed your mind and have crossed out what you consider to be the correct answer, then indicate this by writing the word correct and drawing an arrow: CorrectA service organisation is usually: aegp Capital intensive and produces perishable goods Focused on delivering intangible value to customers ‘Technology focused and uses transformed resource inputs Labour intensive and reliant upon the use of external finance What is a cost associated with warehousing? Costs of new machinery The time saved in distribution Insurance and security of the stock held Expenses associated with borrowing finance ‘Which of the following channels would prove the most challenging in terms of logistics for marketing departments? gop ® Exclusive Intensive Niche Selective The term derivative refers to: An agreement to buy foreign currency at an agreed price on a certain day in the future An assessment of the reliability of a customer's capacity to make timely payments ‘A method of protecting the business against seizure of its assets by a foreign government A method of payment that allows a buyer to gain access to goods immediately ‘and promise to pay later5, Which of the following changes in human resource management is most likely to take place during downturns in the economic cycle? a. Introduction of more non-financial rewards. b, Employees in some jobs become hard to find. ¢. Increased numbers of employees will be offered redundancy packages. 6. Increased numbers of employees will be offered higher remuneration benefits. 6. _ Hows the volume and variety of an operation's output related? The higher the volume, the higher the potential variety of output Low volume prevents a business from offering a customised product High levels of variety and volume of output leads to maximum sales poo Where variety is low, the operation's function can more easily increase volume 7. The issue of predatory pricing and price discrimination have recently come to the attention of authorities. Which of the following statements is true? It is an ethical influence and investigated by the ACCC. It is covered by consumer law and is investigated by the ACCC Itis covered by consumer law and investigated by the Federal police Itis an ethical influence and investigated by the Federal police eege 8. _ In seeking detailed information regarding customer behat a business should undertake? ur, What is the best method ABS census data from the 2016 process Primary method referring to advanced published data Primary method through the use of individual interviews Secondary method using council records highlighting zoning approvals10. 11. 12, Fly Now management recently decided to transfer 400 flight crew jobs to Dubai as a cost cutting measure. Which group of stakeholders would this decision create the most conflict between? eoo® Suppliers and creditors Employees and shareholders Government and shareholders Management and shareholders JIT is an operations strategy that aims to: aes meet deadlines for project completions exactly assess supply chain dynamics for time saving measures reduce inventory levels by ordering stock at the precise time itis needed sell excess inventory just before it expires and thereby increasing logistics Maria Marsh is a Human Resource Manager. She adopts a very ethical approach to managing staff. Which of the following is an example of this approach? eaeoe Ensuring minimum wage rates are paid to employees Provide a safe workplace without risks to health Protecting workers from unfair dismissal Introducing flexible working hours and conditions Which of the following are long-term sources of borrowing? eoge Leasing, overdrafts, mortgage, factoring Mortgage, debentures, overdrafis, leasing Mortgage, debentures, leasing, unsecured notes Overdrafts, commercial bills, debentures, leasing13, Green's Vegetable Distributors has begun sourcing popular Asian style vegetables from Vietnam. Which of the following statements outlines ONE advantage and ONE disadvantage of global sourcing? Increased logistics expenses and risk of damaged inventory in the process Increased risk of interruptions to supply and poorer variety Lower price per unit and wider range of produce Differentiated product lines and restricted ability to oversee quality Use the following information to answer Question 14. Cash flow extract January February March April May Inflows 20,000 15,000 22,000 19,000 50,000 Outflows 75,000 27,000 74,000 31,000 37,000 Opening balance on 1* January is $40,000. 14, What is the opening cash balance on March 1? 38,000 33,000 22,000 3,000 po oe 15. Which stage of the marketing process is adopted when a business compares sales figures to those previously expected in a budget? a, Monitoring b. Financial forecast ¢. Situational analysis d. Examining the target market 16. The owner of a car yard is concemed about the collection of accounts receivable. The owner has put in place strategies to rectify this situation. Which objective of financial management is the ovmner aiming to improve? a. Efficiency b. Liquidity ©. Profitability d. Solvency17. There have been many concerns made recently by false online reviews. Which of the following promotion strategies does this represent? a. Sugging b. Personal selling Sales promotions d. Communications 48. The Human Resource Manager of a small company calls a meeting of his supervisors about the following data 2018 2016 ‘Number of employees 30 30 Number of days lost fo disputes 150 35 ‘Absenteeism ( average days/employee) 70 30 Staff tumover 20% 20% Accidents 70 6 Which of the following would best describe the changing state of the workplace in this business? a. There has been an overall improvement in the corporate culture of the company b. The staff turnover indicates that employees are experiencing worker dissatisfaction c. The change in the number of days lost to disputes and absenteeism indicates that human resource management is now effective d. Strikes have decreased but staff may be using other forms of industrial conflict to express worker dissatisfaction 19. Whats the strategic role of human resource management? ao ep To reduce the cost of production To solve problems on a daily basis To reduce conflicts through effective relationships in the workplace To ensure there is enough money to pay each employee the expected salariesUse the following information to answer Question 20. Selected financial ratios for HHH Pty. Ltd. Ratio 30 June 2016 30 June 2017 | industry average Net profit ratio 12% 12% 18% Expense ratio 76% 81% 7% Return on owners’ equity 18% 14% 18% 20. Which of the following statements is correct? aeog® Net profit ratios are better than the industry average ‘There has been an improvement in the expense ratio from 2016 to 2017 The return on owners’ equity in 2017 is better than the industry average Each of the profitability ratios indicates performance below industry averagesStudent number/name: Section Il 40 marks Attempt questions 21 - 24 Allow about 1 hour and 15 minutes for this section, Answer the question in the spaces provided. Question 21 40 marks Dodge Foods manufactures and sells a variety of soft drinks in Australia. They are looking to expand globally. Despite increasing revenue, profitability has been declining. a. Assess TWO appropriate sources of finance that Dodge Foods could use to fund their overseas expansion. 4 b. Explain ONE global market influence that Dodge Foods will need to consider in its global expansion pians. 2¢. Recommend TWO strategies that Dodge Motors Ltd could use to improve its profitability. 4 10Question 22 10 marks Hugo's Country Style Kitchens Pty. Lid. manufacture standardised, high-quality kitchen appliances that it sells through various retailers. Customised orders can be made online and are shipped directly to the customer. a. Describe TWO ways in which marketing and operations are interdependent in this business. 4 b. Examine how manufacturing quality kitchen appliances could affect operational processes of this business. 6 1Question 23 10 marks A clothing business selling in the casual adult market undertook market research to measure recent customer awareness. The following table shows the results of this survey. Question given in surveys Australia Globally Do you recognise the business name and or jogo? 5% 7% a. Provide TWO reasons for this difference in figures 2 b. _ Whyis establishing a global brand in a clothing business a challenging marketing strategy? 4 ¢. Analyse strategies that could be implemented to establish a global brand. 4 12Question 24 40 marks We Can Build It Construction Ply. Ltd. has a majority of employees who are union members. The management team has assessed the performance of the employees and has found that a number of employees are performing below expectations. The management team would like to take action with a view to terminating the employment of some workers, a. _ Identify TWO strategies the business in the above scenario could use to manage human resources. 2 Outline ONE process of human resource management that relates to the scenario above. 3 c. Describe and recommend an appropriate dispute resolution method that could be used by We Can Build It Construction Pty. Ltd. to help resolve the concerns of at least TWO stakeholders. 5 BSection Ill 20 marks Attempt Question 25 Allow about 35 minutes for this section Answer the question in a SEPARATE writing booklet. Extra writing booklets are available. Jn your answer you will be assessed on how well you 1 demonstrate knowledge and understanding relevant to the question 1 apply the hypothetical business situation. = communicate using relevant business terminology and concepts. 1 present a sustained, logical and cohesive response in the form of a business report. Question 26 (20 marks) Brett Furniture Ply. Lid, is @ successful Australian furniture retailer with 16 retail stores in Australia, The company is known for selling high quality wooden furniture, They currently have 90 employees, ‘The company is preparing to enter the New Zealand market by establishing retail outlets in ‘Auckland and Christchurch. The owners have estimated that their expansion plans should cost approximately (AUD) $8 million and an additional 15 employees will be needed to operate the business in New Zealand. Key challenges for the business include: * Coordinating key business functions. * Determining an appropriate source of finance for the expansion. 7 Developing appropriate human resource management strategies. You have been hired as a consultant by Brett Furniture Pty. Ltd. to write a business report addressing the following areas: + Explain the role of human resources management. * Discuss an appropriate source of finance that could be used to fund the expansion. + Recommend appropriate human resource management strategies that could be used to support Brett Furniture Pty. Ltd. expansion. 14Section IV 20 marks Attempt EITHER Question 26 OR Question 27 Allow about 35 minutes for this section Answer the question in a SEPARATE writing booklet. Extra writing booklets are available. In your answer you will be assessed on how well you: = demonstrate knowledge and understanding relevant to the question ™ apply relevant business case study/studies and contemporary business issues communicate using relevant business terminology and concepts = present a sustained, logical and cohesive response Question 26 (20 marks) Evaluate the impact of product and price strategies on marketing management. OR Question 27 (20 marks) Evaluate the impact of supply chain management (SCM) and quality management strategies on operations, END OF EXAMINATION 15> > Economics and Business Educators New South Wales 2017 Business Studies Trial Higher School Certificate Examination Marking Guidelines Section | Questions 1-20 (1 mark each) Question [Answer 7 B | ~} a] | a] of 7 2 Ky 7 8 rT 7 8 19 of a] of of > >| wo of of Do] of oO Of Ol >] ao 20 162017 EBE NSW TRIAL HIGHER SCHOOL CERTIFICATE EXAMINATION Business Studies Section | Multiple Choice Answer Sheet Student Number/Name: Start Here >. 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AO BO c 1% AD BO C¢ m AD 8O ¢ wa AC 8O 2 ACO BO ° O0000 000000000000 000 ° a O0000 0000000000000 00Question 27 Criteria Marks ~ Makes a well-reasoned judgement, based on criteria, regarding the impact of supply chain management and quality management strategies on operations management. + Applies relevant case study/studies and contemporary business issues. 17-20 * Presents a sustained, logical and cohesive response and ‘communicates clearly using relevant business terminology and concepts. ‘* Makes some judgement regarding the impact of supply chain management and quality management strategies on operations cana management. ‘© Uses relevant case study/studies and contemporary business issues. + Presents a logical and cohesive response using relevant business terminology and concepts. + Provides characteristics and features of the impact of supply chain management and quality management strategies on operations ona management. + May make reference to case study/studies and contemporary business issues. ‘+ Communicates using business terminology and concepts. ~ Sketches in general terms the impact of supply chain management and quality management strategies on operations management. ar * May make reference to case study/studies and/or contemporary business issues. + Communicates using some business terminology and concepts. * Makes limited reference to supply chain management and quality management strategies. 1-4 + May identify case study/studies. + _ Uses basic business terminology. Answers could include: * Supply chain management strategies o Logistics 0 E-commerce © Global sourcing * Quality management strategies © Control © Assurance © Improvement 26Section IV Question 26 Criteria Marks «Makes a well-reasoned judgement, based on criteria, regarding the impact of product and price strategies on marketing management, + Applies relevant case study/studies and contemporary business issues. 47-20 + Presents a sustained, logical and cohesive response and communicates clearly using relevant business terminology and concepts + Makes some judgement regarding the impact of product and price strategies on marketing management. 1346 + Uses relevant case study/studies and contemporary business issues. «Presents a logical and cohesive response using relevant business terminology and concepts. ~ Provides characteristics and features of the impact of product and price strategies on marketing management. oz + May make reference to case study/studies and contemporary business issues. * Communicates using business terminology and concepts. + _ Sketches in general terms the Impact of product and/or price strategies on marketing management 58 May make reference to case study/studies and/or contemporary business issues. * Communicates using some business terminology and concepts. + Makes limited reference to product and/or price strategies. + May identify case study/studies. 14 * Uses basic business terminology. Answers could includ + Product strategies © Goods and/or services © Branding © Packaging * Price strategies Skimming © Penetration © Loss leaders o Price points 25Answers could include: © Role of human resources management ‘© Long term staffing plans and job analysis. These of outsourcing for specific functions of the business ° ‘The interdependence of HR and finance and requirements of the new expansion * Sources of finance 0 Debt—short term Overdraft Commercial bills, Factoring © Debt—Iong term Mortgage Debentures Unsecured notes Leasing ° Equity Ordinary shares (new issues) Private equity = Retained profits [Note: The source of finance selected must be appropriately justified — i.e. certain short-term source of finance may assist the expansion plans but will not cover the entire costs} * Human resource management strategies Leadership style Job design general or specific tasks Recruitment — internal or external, general or specific skills Training and development — current and future skills Performance management ~ developmental or administrative Rewards ~ monetary and non-monetary, individual or group, performance pay Global — costs, skills, supply Workplace disputes — resolution — negotiation, mediation, grievance procedures, involvement of courts and tribunals 0000000 24Section Ill Question 25 Criteria Marks Provides an extensive and clear explanation of the role of human resources management. «Provides an extensive range of points for and/or against an appropriate source of finance that could be used to fund the expansion. + Provides clear reasons in favour of appropriate human resource management strategies that could be used to support Brett Furniture Pty. 17-20 Ltd's. expansion. * Makes effective use of the information provided, demonstrating extensive knowledge and understanding relevant to the question. + Provides a sustained, logical and cohesive business report integrating relevant business terminology and concepts. ~ Provides an explanation of the role of human resources management. + Provides points for and/or against an appropriate source of finance that could be used to fund the expansion. * Provides reasons in favour of human resource management strategies ‘that could be used to support Brett Furniture Pty. Ltd's. expansion. 13-16 + Makes some use of the information provided, demonstrating sound knowledge and understanding relevant to the question. * Presents a logical and cohesive business report using relevant business terminology and concepts. ‘> Sketches in general terms the role of human resources management. + Provides characteristics and features of an appropriate source of finance that could be used to fund the expansion + Provides characteristics and features of a human resource management strategy/strategies that could be used to support Brett Furniture Pty. 9-12 Ltd's. expansion. © Makes limited use of the information provided, demonstrating some knowledge and understanding of the question. ‘+ Includes features of a business report and uses some business terminology and concepts. * Identifies features of human resources management ‘+ Sketches in general terms an appropriate source of finance that could be used to fund the expansion. * Sketches in general terms a human resource management strategy that 5-8 could be used to support Brett Furniture Ply. Ltc's. expansion. + May include some features of a business report and uses basic business terminology. * — Refers to finance and human resources. * Refers to an appropriate source of finance that could be used to fund the expansion. 1-4 * Refers to a human resource management strategy. + _ Uses basic business terminology. 23Answers could include: ‘The company should use a dispute resolution method that enables each stakeholder to be heard and informs each stakeholder about the issues. The dispute resolution method should also minimise costs to the business. Termination of employment should be considered if other dispute resolution methods have failed because this may increase costs to the business (e.g. costs related to recruiting and training new employees to replace the employees who have been terminated). The following grievance procedure could be used: a) _ Negotiation between managers and employees, as well as union representatives. During these discussions employees should be informed about the issues and get an opportunity to be heard. The managers should also make known what kind of improvements they want to see happen. b) Provide a first written warning letter to employees if there is no improvement. ©) Provide a second written warning to employees if there is no improvement after the first warning d) Mediation involving managers, employees and union representatives e) Termination of employees by managers or/and involvement of courts and tribunals. Following the above steps will help the managers to not violate unf dismissal laws. * Students should develop the above aspects of a possible response, answering to the verbs in the question - “describe” and “recommend”. 2Question 24 (b) management that relates to the scenario. Criteria Marks js Clearly sketches in general terms ONE process of human resource 7 management that relates to the scenario. - Sketches in general terms ONE process of human resource 2 Identifies ONE process of human resource management that relates to the scenario, Answers could include an outline of any one of the following: Development ("The management team has assessed the performance of the employees... performance appraisal) Separation (‘The management team would like to take action with a view to terminating the employment of some workers.”) * One of the above processes should be developed, answering to the verb in the question — ‘outline”. Question 24 (c) Criteria Marks Provides characteristics and features of an appropriate dispute resolution method that could be used by We Can Build it Construction Ply. Lid. to help resolve the concerns of at least TWO stakeholders. Provides clear reasons in favour of an appropriate dispute resolution method that could be used by We Can Build It Construction Ply. Ltd. to help resolve the concerns of at least TWO stakeholders. ‘Sketches in general terms an appropriate dispute resolution method that could be used by We Can Build it Construction Pty. Ltd. to help resolve the concerns of at least TWO stakeholders. Provides reasons in favour of an appropriate dispute resolution method that could be used by We Can Build It Construction Pty. Ltd. to help resolve the concerns of at least TWO stakeholders. Tdeniifies an appropriate dispute resolution method that could be used by We Can Build It Construction Pty. Lid. to help resolve the concerns of at least TWO stakeholders. Identifies some reasons for using dispute resolution methods. Makes @ general statement/s about dispute resolution methods. anQuestion 23 (c) Criteria Marks ‘+ Makes TWO effective and detailed implications on marketing strategies used to build a global brand. There may be reference to the clothing 4 business ‘+ Makes TWO effective implications on marketing strategies used to build - a global brand. One implication may be weaker. ‘* Outlines TWO implications on marketing strategies used to build a 2 global brand, «Makes a general statement/s about marketing strategies. 1 Answers could include: Customised product could involve expensive changes to the operations process, global branding and promotion could involve extensive research, standardisation could involve greater levels of debt but also economies of scale whilst global pricing could send varying messages to consumers and the general positioning, Question 24 (a) Criteria Marks Identifies TWO strategies the business in the scenario could use to manage human resources. Identifies ONE strategy the business in the scenario could use to manage human resources. Answers could include: * Leadership style * Job design — general or specific tasks * Recruitment - internal or external, general or specific skills * Training and development — current or future skills * Performance management — developmental or administrative * Rewards — monetary or non-monetary, individual or group, performance pay * Global costs, skills, supply * Dispute resolution methods 20Answers could include: Hugo's option to provide quality kitchen appliances (with customisation) impacts the task design, technologies used and the factory layout of the business. Manufacturing quality appliances (high variety) demands greater time and resources to produce, resulting in a slower completion rate (low volume). Due to Hugo's dual output of quality and customised appliances, this is likely to be reflected in operational processes. For example, task design will be more open and require more skills to produce quality kitchen equipment as opposed to the low skill roles in standardised production. Technologies required to produce quality will be less-automated and more fiexible. The layout of the factory may need to be split into two main sections: one with a product layout for standardised, mass produced appliances and the other a process layout for the customised pieces. Question 23 (a) Criteria Marks '* Provides TWO reasons to explain why the brand is recognised 2 domestically whilst almost unheard of globally. * Provides ONE reason to explain why the brand is recognised domestically whilst almost unheard of globally AND/OR * Provides TWO reasons but does not relate these to the clothing business. Answers could include: Different stage of life cycle, business commenced in Australia, heavy promotion by competitors in host market, level of competition in the clothing industry is always fierce and local fashion may better reflect host nation culture. Question 23 (b) Criteria Marks > Clearly examines marketing strategies issues involved in the global challenges beyond expected in the domestic market. There is detailed 4 reference to issues dealing with a clothing business. + _ Examines the issues involved in the global challenges beyond expected in the domestic market. There is reference to issues dealing with a 3 clothing business. * _ Outlines the issues involved in the global challenges and may make . some reference to the clothing industry = Makes a general statemant/s about the issues involved in global ‘ marketing. Answers could include: Different markets in fashions will require greater research, particularly primary. In addition, the business may have to customise its products and hence greater time and expenses are required. This will present major planning and financial challenges. The business will undertake customised promotion and one that establishes the brand name. Whilst in terms of pricing the business may have to use penetration pricing that differs from domestic. Either of these aspects offers marketing challenges. 19Answers could include: Cost controls — fixed and variable, cost centres, expense minimisation. Revenue controls — marketing objectives. ‘The fact that revenue has been increasing means this business should focus attention on reducing expenses to lift profitability. Question 22 (a) Criteria Marks: + Effectively describes TWO ways that marketing and operations are 7 interdependent, with detailed reference to the case study business + Describes TWO ways that marketing and operations may be i interdependent with some reference to the case study business. * Outlines TWO ways that marketing and operations are interdependent. 2 + Makes a general statement/s about the interdependence between 7 operations and marketing. Answers could include: Price: The positioning of Hugo's output is one of high quality. This should result in prices being set higher to reflect this and obtain higher margins. Prices for quality kitchens should again be set higher as this demands greater inputs in operations to produce. Place: The standardised kitchens produced at Hugo's is distributed through retail chains that hopefully align with the positioning of the business's output. The online sales of customised kitchens requires Hugo's to package and distribute output directly to customers, resulting in additional tasks in operations. ‘Question 22 (b) Criteria Marks ‘© Examines in detail how customisation could impact two or more of the following: task design, technology, layout, 4Vs. Makes significant reference 6 to the case study stimulus. ‘* Examines how customisation could impact two of the following: task design, 3 technology, layout, 4Vs. Makes some reference to the case study stimulus. * Describes how customisation could impact two of the following: task desian, [4 technology, layout, 4Vs. Makes few references fo the case study stimulus. ‘* Describe in general terms how customisation impacts operational 3 processes, with few references to the case study stimulus. * Outlines some possible impacts customisation has on operational 7 processes, ‘* Makes a general statement/s about some impacts of customisation. 1 18Section It Question 24 (a) Criteria Marks > Provides comprehensive judgementireasons in favour of TWO appropriate sources of finance that Dodge Foods could use. ‘* Provides comprehensive judgement in favour of ONE appropriate source of finance AND provides some reasons in favour of ONE 3 appropriate source of finance that Dodge Foods could use. > Provides some reasons in favour of TWO sources of finance OR provides comprehensive reasons in favour of ONE appropriate source 2 of finance that Dodge Foods could use. * Sketches in general terms sources of finance that Dodge Foods could use. Answers could include: mortgage, debentures, unsecured notes, leasing. Students should consider there is growth in revenue and hence this should be valuable in terms of sourcing debt finance, In terms of falling profit, this will have a negative impact on retained earnings. Question 21 (b) Criteria Marks * Clearly relates cause and effect of ONE global market influence that 2 Dodge Foods will need to consider. ‘* Sketches in general terms ONE global market influence that Dodge Foods will need to consider. Answers could include: economic outlook, availability of funds, interest rates. Each one of these influences will affect the amount, cost and availability of global funds available for investment. Question 21 (c) Criteria Marks ~ Provides comprehensive reasons in favour of TWO appropriate 7 profitability management strategies that Dodge Foods could use. Provides comprehensive reasons in favour of ONE appropriate profitability management strategy AND provides some reasons in 3 favour of ONE appropriate profitability management strategy that Dodge Foods could use. = Provides some reasons in favour of TWO profitability management strategies OR provides comprehensive reasons in favour of ONE 2 profitability management strategy that Dodge Foods could use. = Sketches in general terms strategies that Dodge Foods could use. 1 7