CAIE IGCSE Business Studies 4.5 Quality of Goods and Services Questions
Use this quality page to explain why quality matters, compare methods and justify how a business should achieve good quality.
- Syllabus
- 2027–2029
- Course
- Business 0264
Exam points
- Explain quality assurance benefits such as fewer mistakes, lower waste or fewer complaints.
- Compare quality control and quality assurance in production or service contexts.
- Justify the most important way to improve quality using the case evidence.
Covered syllabus points
Question 1
[Maximum number: 4]
NSL is a business based in country X．It manufactures food products including bread and breakfast cereals．NSL uses lean production in its factory．Maintaining quality is important．NSL imports 15% of its raw materials．Changes in country X＇s exchange rate can affect businesses which import raw materials．NSL＇s Marketing Manager knows the business should respond to changes in consumer spending patterns．She is aware that market research can be used to help make business decisions．
Outline two reasons why maintaining quality is important for NSL．
Reason 1：
Reason 2：
Outline two reasons why maintaining quality is important for NSL.
Award 1 mark for each relevant reason (max 2).
Award 1 mark for each relevant reference to this business (max 2).
Points might include:
- Develop strong brand image / generate good publicity / better reputation [k] for its food [app]
- Keep customer loyalty/remain competitive [k] which may help as spending patterns change [app]
- Can charge high/premium prices [k] which may help cover any effect of exchange rates [app]
- Lower costs/less wastage [k] at the factory [app]
- Fewer customer complaints/returns [k]
- Attract new customers/increase sales [k]
- To meet legal requirements [k] such as food standards [app]
- It adds value [k]
Other appropriate responses should be credited.
To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made.
The following words are likely to be appropriate for this question:
- Food or related words such as ingredients, breakfast cereal, bread
- Manufacture
- (Consumer) spending patterns change
- Factory
- Exchange rates
- ( 15% of raw) materials are imported
- Lean production
Other appropriate examples can be credited.
Question 2
[Maximum number: 6]
FSW is a multinational company with operations in 6 countries. It manufactures steel for use in the construction industry. Quality assurance is used to ensure quality production. FSW has many stakeholder groups who are interested in its activities. The Managing Director knows FSW's business creates external costs. She is aware that pressure groups try to influence business decisions.
Do you think quality assurance is the best way for a business to achieve quality production? Justify your answer.
Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for a justified decision as to whether quality assurance is the best way for a business to achieve quality production.
Points might include:
Quality assurance:
- Errors are spotted earlier in process [k], so less money/time spent on rework [an]
- Increased motivation of employees [k] leading to higher output [an]
- Need to train all workers [k] which increases training costs [an]
- Time taken to train all workers [k] who may ask for higher wages [an]
- Slows down production/time consuming [k] therefore productivity will fall [an]
- Not all workers might be interested/able to spot problems [k]
Quality control [k]
- Does not stop production while checking [an] so some output is made [an]
- Not all workers need to be trained [an] which can help reduce fixed costs [an]
- Need to recruit quality inspectors [an] increasing labour cost [an]
- Does not find out how/where fault occurred [an]
- Products will need to be scrapped/reworked [an]
This is a general question so there are no marks for application.
Some points can be presented as an advantage or a disadvantage of different methods but do not award the same point twice.
Quality assurance: Accept - reduces wastage as either [k] or [an] but only once.
- Does not encourage all workers to be responsible for quality [an]
- Does not improve quality as only reduces chance of selling poor quality products [an]
- Not possible to check all products [an] damaging reputation [an]
Other appropriate responses should be credited.
Justification might include:
Quality assurance allows for errors to be spotted earlier in the process [k], so less time is spent on rework [an]. An advantage of quality control [k] is not everyone needs to be trained to check quality [an]. Quality assurance is the best way because the extra training provided is also likely to motivate employees leading to fewer mistakes anyway, and this should hopefully cover the additional cost of training. [eval] [eval].
Question 3
[Maximum number: 6]
TBX manufactures high-quality steel which is used to build railways. The method of production used allows TBX to benefit from economies of scale. The business holds a high level of inventory including iron ore. The Managing Director knows business activity could have an impact on the environment and is considering ways the business can contribute to sustainable development.
Do you think quality control is the best method for a manufacturing business to use to achieve quality production? Justify your answer.
Award up to 2 marks for identification of relevant points.
Award up to 2 marks for relevant development of points.
Award up to 2 marks for a justified decision as to whether quality control is the best way for a manufacturing business to use to achieve quality production.
Points might include:
Quality control (QC):
- Tries to eliminate/lower chance of faults before products reaches customer [k] to help maintain reputation [an]
- Does not stop production while checking [k] so some output is available [an]
- Need to recruit inspectors [k] which increases labour costs [an]
- Spots errors at end/does not show where error happened in process [k] which could increase wastage [an]
This is a general question so there are no marks for application.
Advantages of one method can be presented as a disadvantage of the other, but do not award the same point twice.
Other method is:
Quality assurance (QA) [k]
- Errors stopped before happen/spotted earlier in process/products checked throughout [an] so less funds/time spent on rework [an]
- Increase employee motivation [an] leading to higher output [an]
- Need to train all employees [an] which increases (fixed) costs [an]
- Not all workers interested/able to spot problems [an]
Other appropriate responses should be credited.
Justification might include:
With quality control, production workers do not need extra training [k] so no increase in costs [an]. Another method is quality assurance [k] which means mistakes are spotted sooner in the process [an]. Quality assurance is the best way because fewer mistakes is likely to mean fewer resources are wasted [eval] and the funds saved should hopefully cover the additional cost of training [eval].
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