CAIE A-Level Business 4 Operations Management Question Bank

CAIE A-Level Business 4 Operations Management Question Bank
Cambridge International AS & A Level Business 9609 syllabus for exams in 2026, 2027 and 20282026–2028

Practise Operations Management through transformation, inventory, capacity, lean production, projects, quality, location and sustainability, applying decisions to case constraints.

Covered syllabus points

4.1 The nature of operations4.2 Inventory management4.3 Capacity utilisation and outsourcing

Question 1(a)(i)

[Maximum number: 1]

The Research Agency (TRA)

TRA is a quaternary sector business. It is the market leader in providing social media data to food manufacturers in country F. TRA's market has grown by 40% over the last year.

DF is a multinational business that specialises in non-alcoholic drinks. DF has asked TRA for data about a new bottle of water with pod attachments. The pods give a fruity flavour which is combined with sparkling water. TRA has sampled 8000 potential consumers on social media to identify their favourite fruity flavour (see Fig. 1.1).

Fig. 1.1 Data about consumer flavour preferences for DF

Fig. 1.1 Data about consumer flavour preferences for DF

TRA employs 65 researchers. Since 2020, all of these employees work from home. They are provided with all the necessary IT equipment and a high-speed internet connection. However, motivation is poor, and this has led to high labour turnover. The Human Resource Director has received some feedback from employees. Fig. 1.2 shows some of this feedback.
- I hate being so isolated - I never get to speak to any other employees.
- I have to use my own electricity, and the cost has doubled in the last two years.
- I know some employees are not working very hard, but they get paid the same as me. It's not fair!

Identify one stage of the transformational process.

Question 1

Question 1(b)(i)

(a)

Refer to Table 1.1. Calculate NS's capacity utilisation in 2024.

[ 3 ]

Question 1(b)(ii)

(b)

Explain one possible disadvantage to NS of high capacity utilisation.

[ 3 ]

Question 1(c)

[Maximum number: 8]

Analyse two limitations to SF of operating as a capital intensive business.

Question 1

[Maximum number: 18]

Crafty Toys (CT)

CT is a co-operative that produces and sells a range of wooden toys, such as puzzles, cars and dolls. The co-operative was formed in 2020 by a group of 12 people who share a passion for making toys. They wanted to work together to create quality products that would appeal to children and parents. No one person takes on the role of manager; instead, they share the traditional manager functions between them.

CT operates from a large workshop in a rural area of country Z, making toys using labour-intensive techniques. CT uses locally sourced wood that is certified as eco-friendly. CT also uses natural paints and finishes that are safe and non-toxic for children. Table 1.1 shows CT's output in 2024.

CT sells its products online through its own website and social media platforms, as well as through some independent retailers who specialise in ethical products. The co-operative

Table 1.1 Output data for CT in 2024

Table 1.1 Output data for CT in 2024

also attends various trade fairs and exhibitions to showcase its products and network with potential customers and suppliers. CT has never researched customer wants.

CT faces some challenges in its current operations. These challenges include:
- high costs of production
- a long lead time
- a requirement for skilled workers.

CT is considering changing to flow production to overcome these challenges.

Question 1(b)(i)

(a)

Refer to Table 1.1. Calculate the labour productivity for CT in 2024.

[ 3 ]

Question 1(b)(ii)

(b)

Explain one advantage to CT of labour-intensive operations.

[ 3 ]

Question 1(d)

(c)

Evaluate whether CT should change to flow production.

[ 12 ]

Question 3

Question 3(a)

(a)

Define the term labour productivity.

[ 2 ]

Question 3(b)

(b)

Explain one way that a business can improve labour productivity.

[ 3 ]

Question 3

Question 3(a)

(a)

Define the term Just in Time (JIT).

[ 2 ]

Question 3(b)

(b)

Explain one disadvantage to a business of using Just in Time (JIT).

[ 3 ]

Question 2(c)

[Maximum number: 8]



Popular Drinks (PD)

PD is a mass market fizzy drinks manufacturer in country Z. The fizzy drinks market in country Z is dominated by a few well-known brands. The total market value is $ 5.3 bn and the PD brand has a 17% share of this market.

Pablo was recruited to be the Marketing Director of PD in 2022. He launched a new promotional campaign based on trending music on social media. He decided to use social media influencers to focus on this market.

Online feedback of the campaign was poor. Many of PD's customers did not want to be associated with trending music. National news highlighted the negative feedback and PD's sales volume decreased by 20% within a week and continued falling. This led to excess inventory in PD's warehouses. The bad publicity also caused a drop in PD's share price and a negative impact on cash flow.

Fig. 2.1 shows feedback from a recent questionnaire where previous PD customers were asked what they thought about the promotional campaign.

Fig. 2.1 Market analysis data of a sample of PD's customers

Fig. 2.1 Market analysis data of a sample of PD's customers

Pablo has called an emergency meeting of PD's marketing managers to repair the damage done to the PD brand from this recent promotional campaign.

Analyse two possible costs to PD of holding inventory.

Question 2

[Maximum number: 11]

Law Advice Forum (LAF)

Drake has a law degree and works for a partnership of lawyers during the day. Drake owns a website that gives free legal advice. He works on the website in the evenings and at the weekend.

He started the website as a hobby, but the website has grown to over 20000 users and he now sells advertising on his videos and on the website.

Drake uses outsourcing for some areas of his website. He has recently been sent a report showing variances in the budget from the previous month (see Table 2.1).

Table 2.1 Budget report for Drake's website in the previous month

Table 2.1 Budget report for Drake's website in the previous month

Drake has now left his job and is focusing full time on the website. He rebranded the website as Law Advice Forum (LAF). Drake's business plan for LAF included:
- Operating as a sole trader.
- Continuing to develop and expand the website to provide legal advice and paid legal services.
- Renting an office in city G where all employees would work.
- Hiring five fully qualified lawyers.
- Hiring three administrators.
- Leasing IT equipment.

However, Drake is concerned about the limitations LAF will face as a labour intensive operation.

Question 2(a)(ii)

(a)

Explain the term outsourcing.

[ 3 ]

Question 2(c)

(b)

Analyse two possible limitations for LAF as a labour intensive operation.

[ 8 ]