Item A: Oakline Studio makes customised dining tables using job production. Orders have risen by 40%, but average delivery time has increased from six to eleven weeks.
State the production method currently used by Oakline Studio.
Automated cutting equipment would cost £310,000, increase cutting capacity by 70% and reduce the number of available table shapes from 24 to eight.
Outline one operational benefit to Oakline Studio of the automated equipment.
Customer research shows that 68% of customers value custom choice most, while 21% value fast delivery most.
Oakline Studio is considering two capacity options:
Option 1: Buy the automated cutting equipment
Option 2: Retain the current equipment and recruit five skilled employees at an annual cost of £190,000
Justify which one of these two capacity options Oakline Studio should choose.
38 exam-style questions on Edexcel GCSE Business 2.3 Making operational decisions, covering 2.3.1a The purpose of business operations, 2.3.1b Production processes, 2.3.1c Impacts of technology on production, 2.3.2a Managing stock: bar gate stock graphs, 2.3.2b Managing stock: just in time (JIT), 2.3.2c Relationships with suppliers, 2.3.2d Impact of logistics and supply decisions, 2.3.3a Quality control and quality assurance, 2.3.3b Quality, costs and competitive advantage, 2.3.4a The sales process, and 2.3.4b The importance of good customer service. Each one has a worked solution and a mark scheme showing where the marks go.