AQA GSCE Business

AQA GSCEBusiness

Question PaperPaper 1a

PRACTICE EXAM PAPER

Write your name here

Centre Number Candidate Number

Surname

Practice paperTime: 1 hour 45 Minutes

You do not need any other materials Total Marks

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Paper 1a

Other names

GCSE BusinessPaper 1a:

Materials For this paper you must have: • a calculator

Instructions • Use black ink or black ball-point pen • Fill in the boxes at the top of this page • Answer all questions • You must answer the questions in the spaces provided. Do not write outside the box, around each page or on blank pages • Do all rough work in this answer book. Cross through any work you do not want to be marked

Advice • The marks for each question are shown in brackets • The maximum mark for this paper is 90

AQA GCSE Business Practice Exam Paper 1a

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ANSWER ALL QUESTIONS IN THIS SECTION

AQA GCSE Business Paper 1aSection A

01.1 Which of the following types of business does not operate in the tertiary sector?

A Distribution B Banking C Farming D Clothing retailer

(1 mark)

01.2 A business has decided to take greater environmental responsibility when making decisions. What is the benefit to the business of doing this?

A It may increase costs B Customer loyalty will improve C Employees may look for other jobs D It will help prevent global warming

(1 mark)

01.3 Which of the following would be a reason for a new business to prepare a business plan?

A Banks are more likely to provide loans B It is a legal requirement C It will encourage repeat business D It will cost time and money to prepare

(1 mark)

Only one answer per question is allowed.

For each answer completely fill in the circle alongside the appropriate answer.

Correct method: Wrong methods:

If you want to change your answer you must cross out your original answer as shown.

If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown.

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01.5 Which of the following documents would a business use to ensure it recruited a new member of staff with the right skills and qualifications?

A Curriculum vitae B Job advertisement C Job description D Person specification

(1 mark)

01.6 Which of the following fringe benefits would be most suitable for a small shop to offer to its employees?

A A cash bonus B A company car C Discount on purchases D Profit sharing

(1 mark)

01.7 Identify two disadvantages of a business operating as a sole trader.

(2 marks)

01.4 What is the benefit to a business of improving its logistic processes?

A There will be less pollution B Transport costs may increase C Procurement will be easier D Distribution will be more efficient

(1 mark)

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01.8 Explain one reason why an entrepreneur would want to start their own business.

(2 marks)

01.9 Explain one reason why a business might not benefit from an increase in consumer incomes.

(3 marks)


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01.10 Explain one way that introducing lean production techniques could decrease the costs of a business.

(3 marks)

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01.11 Explain two benefits to a business of training its workforce.

(4 marks)

Benefit 1

Benefit 2

End of Section ATurn over for Section B


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ANSWER ALL QUESTIONS IN THE SPACES PROVIDED

Section B

Tesco has been operating for nearly 100 years. It was founded by Jack Cohen who started the business selling food in a London market. He then merged with a tea supplier, T.E. Stockwell, and together they formed Tesco.

Tesco has expanded rapidly and is now Britain’s biggest retailer. It has over 2,000 stores, including some in other countries. The company employs over 450,000 employees. After a difficult and loss making year in 2015, Tesco made profits of nearly £1 billion in 2016.

Tesco place high importance on all its employees. One of the firm’s key objectives is to employ staff that are motivated, flexible and well-trained, at every level of the organisation. In order to achieve these high levels of motivation, Tesco offers pay rates that are at least as good as other similar supermarkets. It also offers other employee benefits such as staff discounts, flexible working and cheap gym membership.

Moreover, the firm has a staff development programme that allows employees to decide their career pathway in the organisation. Tesco then provides suitable training that matches each member of staff’s future career needs. In addition to this training, all Tesco employees are trained to provide excellent customer service. In order to improve motivation further, the business involves its staff in decision-making and encourages worker responsibility through delegation.

Tesco’s also aims to be a globally responsible firm. In order to achieve this, the company provides jobs for young people, targets products at improving customer health and takes a lead in reducing food waste across the world.

02.1 Identify two economies of scale that Tesco will benefit from.

(2 marks)

02 Item A: Tesco

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02.2 Employees receive a 10% discount on their shopping at Tesco stores.

Calculate the weekly benefit to an employee who on average spends £14 each weekday and £22 on each day at the weekend.

(3 marks)

Workings

02.3 Identify two business examples of ethical behaviour.

(2 marks)


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02.4 Analyse one way that Tesco may be affected by its aim to be a globally responsible firm.

(6 marks)

Question 2 continues on the next page

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Tesco is the biggest private sector employer in the UK. Its stores range from small local Tesco Express, to large Tesco Extras and superstores. The locations of these stores are carefully chosen, to ensure that they are convenient for both customers and employees. Over 80% of the company’s sales are generated from the stores based in the UK.

In order for Tesco to run efficiently, the firm requires employees for a wide range of jobs. In stores, it needs checkout staff, stock handlers, supervisors as well as many specialists, such as pharmacists and bakers. Its distribution depots require people skilled in stock management and transportation, whereas at Tesco’s head office, there are many management and administration roles available.

In order to ensure that the firm has the right number or people of the right quality to operate successfully, Tesco has a well thought out process for recruitment and selection. It advertises jobs in different ways depending on the job available.

Tesco first tries internal recruitment to fill any vacancy. This allows current employees to apply for the jobs, either at the same level or as a promotion. After two weeks, if there are no suitable applicants, the firm then recruits externally. For external recruitment, Tesco advertises its vacancies using its website www.tesco-careers.com and through vacancy boards in its stores.

The Tesco website is very successful in filling most vacancies, but there are often shortages of applications for the more specialist positions, such as bakers, pharmacists and in some areas, store managers/supervisors. Tesco therefore advertises for these positions using different means. Specialist websites, magazines, such as “The Grocer”, “Pharmacist Journal” and “Management Weekly”, and job agencies are used. These methods are expensive, but are sometimes necessary to ensure the right people are appointed.

Tesco also employs an increasing number of employees for its online delivery services, which has allowed Tesco to access wider markets. The business currently holds a market share of 40% of the UK online grocery market. The growth of online shopping has however, resulted in some of its stores being less busy. The lower customer numbers in store is not only due to the growth of ecommerce, but also due to shoppers switching to cheaper competitors such as Aldi and Lidl.

The growth of online sales has however, also meant the business has to pay extra costs for staff to pick food from the shelves for customer orders, an increasing cost due to the business recently introducing a new service, whereby customers can order online and then collect their shopping in one of Tesco’s stores, through its “click and collect” service, 3 hours later. The business has also incurred additional costs of paying for both delivery drivers and extra vans, for customers who opt for their online order to be delivered directly to their home addresses.

Item B: Tesco


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02.5 Analyse the benefit to Tesco of using internal recruitment for its store manager positions.

(6 marks)

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02.6 Analyse the importance to Tesco of having the right location for its stores.

(6 marks)


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02.7 Recommend whether Tesco should continue to invest in its online delivery service. Give reasons for your advice.

(9 marks)

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End of Section BTurn over for Section C


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Section C

Jim Walls set up Quality Wallpaper Ltd ten years ago after he lost his job in a local factory. The factory closed due to a decrease in demand caused by the poor economy at that time. His business idea was to produce a range of wallpapers that would wipe clean and would therefore appeal to families with young children. Using his redundancy money, Jim hired a factory unit where he could design and make small quantities of wallpaper exactly to his customer requirements. With the improvement in the economy and rising employment levels in the area, Jim has been able to charge high prices for his wallpaper and make a good profit.

Over the last year, Jim has struggled to meet all the orders that his successful company has received. He has also found himself getting more and more requests to supply paint and to offer a home decorating service. To date, Jim has not really planned his business in detail. He has managed to operate with some second hand machinery and five employees, who he used to work with at the factory. As he is now also getting orders from locations outside of the local area, Jim has decided that the time is right to produce a business plan and to expand his company.

His own research and calculations have shown that making paint in large quantities would require expensive machinery, but would have low running costs and few employees. He would need additional finance, through a loan, to rent new larger premises and to purchase this new machinery if he were to start paint production. Investing in new machines would also allow him to increase wallpaper production to meet the growing demand for this product. He has also researched that if he offered a home decorating service, he would need to invest significantly in the recruitment and selection of managers and decorators, as he would require a large workforce to successfully run this service.

Jim has given some thought to possible new organisational structures for the expanded business. If he went ahead and offered all three products/services, he would centralise the painting and wallpaper production, but the home decorating service would be decentralised. He would therefore appoint a manager for each area, in which the home decorating service would be offered.

03 Item C: Quality Wallpaper Ltd

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03.1 Explain one advantage to Quality Wallpaper Ltd of choosing a decentralised structure for its proposed home decorating service.

(2 marks)

03.2 Explain one possible objective of Quality Wallpapers Ltd as it considers what its future plans should be.

(4 marks)

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03.4 Jim has decided to research the cost of renting the wallpaper machinery, rather than purchasing it. He has three options that he is currently considering. Using the information provided in Table 1, calculate which of the three machines would be the cheapest to rent and run in the first year, assuming that Quality Wallpaper Ltd produce 10,000 rolls of wallpaper a week for 50 weeks of the year. Show all your workings and comment on your choice

(5 marks)

Table1

Machine Annual cost of renting machine Cost per roll

A £5,500,000 £1

B £3,800,000 £4

C £4,500,000 £2

Choice of Machine:

Comment

Cost in first year:

Workings


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03.5 Jim is still undecided whether to go ahead with the two ideas of paint manufacturing and setting up a home decorating service.

Recommend which would be the best option for the company. Give reasons for your choice.

(9 marks)

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Section D

Jim has been researching the home decorating service further and has discovered an alternative to the set-up of this business, which would be to sell franchises to entrepreneurs who would like to run a decorating business in their local area. Quality Wallpaper Ltd would then supply the paint and wallpaper to the franchisees, as well as collect the initial and annual franchise fee. Jim is however worried as to how he could maintain the company’s existing high quality reputation, if these franchises were set up across the country. To overcome this issue, Jim would have to ensure that he selected suitable people to become the franchisees in the first place. The franchisees would then be in charge of their own recruitment of staff in their own area, reducing Jim’s workload.

However, if Quality Wallpaper Ltd was to run the decorating service itself and not offer franchises, Jim recognises there would be a long recruitment process to make sure the best painters and decorators were selected over a large geographical area. Communicating and managing a large number of employees on an ongoing basis could also prove difficult for Jim, even if the decorating service was restricted to areas near the company’s wallpaper factory.

Whichever expansion option Quality Wallpaper Ltd chooses to take, the company will face much increased competition. Large multinational firms already exist in the paint and wallpaper market. The company could also be at risk, as it will need to borrow large sums of money to finance the expansion and may suffer from diseconomies of scale, which could outweigh any benefits from business growth. However, if successful, Jim believes that the business could still make good financial returns due to the firm’s history.

Item D: Quality Wallpaper Ltd

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03.6 Analyse the impact of expanding using a franchise operation for the home decorating service rather than the company employing its own additional staff. In your answer should consider:

• The suitability of a franchise operation

• Recruitment of suitable new additional employees

You must evaluate which area will have the biggest impact on the business. Use evidence to support your answer.

(12 marks)

AQA GSCE Business

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