CAIE A-Level Business A2 9.2.1 Quality Control and Assurance

[Maximum number: 8]

Soymai Farms (SF)

SF is a private limited company. SF owns three farms in country B. SF’s core activity is growing a range of agricultural crops. Soya and maize account for 90% of output. Most of SF’s output is sold to manufacturers of products such as soymeal and soya oil.

To increase value added, SF has diversified into manufacturing soya-based products including tofu and soya ice cream. SF owns a factory close to its farms. SF’s sales of tofu have been successful since it was launched in 2010. SF has developed its branding and sells tofu to independent retailers and a national supermarket in country B.

Flexible employment contracts

Core workers, who are employed on full-time permanent contracts, include mechanics, farm labourers and machine operatives. Labour turnover is low.

Most employees, however, have flexible employment contracts which include temporary or zero-hour contracts. These employees are unskilled and receive limited training. All employees on flexible contracts are paid the same hourly wage.

Factory operations nearing capacity

With the increasing sales of Sosoy Ice Cream, tofu and other soya products, capacity utilisation is a problem as it is above 90%. The factory already operates three shifts a day to fulfil demand. SF’s Managing Director is considering whether to expand capacity to meet forecast demand. He believes there are two viable options:
• invest in the latest technology to automate production in the existing factory
• outsource production of Sosoy Ice Cream.

Quality problems

SF uses quality control inspectors to check final products meet quality standards. The factory manager is concerned about a rise in the proportion of soya ice cream and tofu rejected by inspectors in the last year. She has discussed this with directors, who have decided to implement total quality management (TQM) at SF.

Analyse two problems SF may experience when implementing total quality management (TQM).

Level	AO1 Knowledge and understanding — 2 marks	AO2 Application — 2 marks	AO3 Analysis — 4 marks
2			3–4 marks Developed analysis • Developed analysis that identifies connections between causes, impacts and/or consequences of two points. • Developed analysis that identifies connections between causes, impacts and/or consequences of one point.
1	1–2 marks • Knowledge of two relevant points is used to answer the question. • Knowledge of one relevant point is used to answer the question.	1–2 marks • Application of two relevant points to a business context. • Application of one relevant point to a business context.	1–2 marks Limited analysis • Limited analysis that identifies connections between causes, impacts and/or consequences of two points. • Limited analysis that identifies connections between causes, impacts and/or consequences of one point.
0	0 marks No creditable response.	0 marks No creditable response.	0 marks No creditable response.

Analyse two problems SF may experience when implementing total quality management (TQM).

Figure for Answer to Question 1 — CAIE A-Level Business A2

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Note:

- Only reward problems/disadvantages.

- If more than two problems are referred to, reward the best two.

- L2AN (3 marks) is possible for just one point made.

All annotation ( $\mathbb{K}$ ) sam ( AN ) should be in the left margin.

Indicative content

AO1 Knowledge and understanding

Definition of relevant terms (max K 1 mark)

- TQM is a method of quality assurance that aims to involve all employees in quality improvements.

- Encourages workers to get it right first time and to achieve zero defects.

Knowledge of problems when implementing TQM (max K 2 marks)

- Problems may include:

- Cost of training for employees.

- Resistance from employees.

- Short term negative impacts on productivity and or quality as changes are embedded.

- Lack of managerial skills of motivation, delegation of decision making, teamwork, communication and coordination.

- Requires a change in culture within the business.

- Impact of making quality inspectors redundant.

- Time consuming - with a reason e.g. training staff, changing culture, change policies, employees checking work.

- Nature of the product - TQM on ice cream - how to implement quality checks?

AO2 Application

Limited application, ${ }^{\mathrm{APP}}$ applies knowledge to SF once.

Developed application, ${ }^{\triangle \mathrm{PP}}+{ }^{\mathrm{APP}}$ applies knowledge to SF twice.

Max one ${ }^{\mathrm{APP}}$ for application for the first problem and max one ${ }^{\mathrm{APP}}$ for application for the second problem.

- SF's use of flexible contracts including part-time, temporary and zero-hours.

- Temporary workers employed at harvest time for short period.

- Current approach focuses on detection of quality problems rather than prevention.

- Factory operating close to capacity.

- Limited training given to peripheral employees.

- Unskilled workers - more training required.

PUBLISHED

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AO3 Analysis

Limited analysis ${ }^{\mathrm{AN}}$ - candidate shows one link in the chain of analysis.

Developed analysis ${ }^{\text {L2 AN }}$ - candidate shows two or more links in the chain of analysis.

- Difficult to change culture of business as many employees are on flexible contracts and may therefore lack commitment to the business AN .

- Cost of training will be relatively high as workers on temporary contracts not in the business for long. Each new group of temporary workers at harvest time each year will need training, increasing costs ${ }^{\text {AN }}$ .

- No need for quality inspectors so may need to make redundancies AN adding to costs of implementation and causing concerns over job security which could reduce productivity L2AN.

- In short-term may result in increase in defective products as adjusting to TQM approach takes time. This could result in short-term customer dissatisfaction and impact sales negatively AN and therefore reducing profit L2AN.

Accept all valid responses.

CAIE A-Level Business A2 9.2.1 Quality Control and Assurance Topic Practice

Question 1