These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
02 Hours 15 Minutes
75 Marks
Calculator is allowed
IB BUSINESS MANAGEMENT HL, Paper 2, May, 2012, TZ0, Solved Past Paper
Master the 2012 IB May for Paper 2 Business Management HL with examiner tailored solutions and comments for TZ0
Question 1 [Explained]
Trent Peters, a partner at Safe Passage (SP), is exploring options to expand their bodyguard services into Asia. SP is considering two main strategies: offshoring by establishing a branch in an Asian country or subcontracting through an external agency. The decision involves evaluating forecast costs and revenues, considering the impact on SP's unique selling propositions (USPs), and addressing concerns about quality and customer perception. This question examines various aspects of this business decision, including the features of a partnership, the benefits and costs of contingency planning, the use of decision trees, and the disadvantages of subcontracting.
Question 1 [a] [Explanation]
This question asks you to describe two features of a partnership as a business structure. A partnership is a common form of business organization where two or more individuals share ownership and responsibilities.
Question 1 [b] [Explanation]
This question requires you to explain two benefits and one cost to SP of preparing a contingency plan for the three possible locations in Asia. A contingency plan is a proactive strategy to manage potential risks and uncertainties.
Question 1 [c] [i] [Explanation]
This question asks you to construct a fully labelled decision tree and calculate the predicted outcome of each offshoring option. A decision tree is a visual representation of possible decision paths and their potential outcomes.
Question 1 [c] [ii] [Explanation]
This question asks you to comment on the value for SP of using a decision tree as a decision-making tool. A decision tree provides a structured approach to evaluating different options and their potential outcomes.
Question 1 [d] [Explanation]
This question requires you to examine two disadvantages for SP of subcontracting its recruitment and training of bodyguards. Subcontracting involves outsourcing specific business functions to an external agency.
Question 2 [Explained]
Barbara Johnson manages a small business, GF, that produces and sells gluten-free bread. GF is known for meeting national quality standards, which has helped increase sales. Local supermarkets sell their own label brands of gluten-free bread at a price 20% cheaper than GF. Barbara aims to make national quality standard gluten-free bread more affordable and in larger batches.
GF has 21 employees, including four gluten-sensitive testers who check the quality of the final bread. This traditional method of quality control is important but time-consuming and resource-intensive. Several hospitals have asked if GF can provide them with an additional 1200 loaves of gluten-free bread every day for the next year. Barbara is keen, but in a small market, becoming larger does not automatically result in economies of scale. GF's suppliers cannot provide larger quantities of gluten-free flour without increasing their prices and consequently GF's costs.
Barbara has two options:
- Option 1: Increase GF's production of gluten-free bread and maintain national quality standards by introducing total quality management (TQM) control at a one-off cost of $4000. This should also speed up the batch production process.
- Option 2: Buy-in the additional 1200 loaves from the company that supplies the local supermarkets and then sell this bread to the hospitals. However, this supplier uses flow production and does not meet national quality standards.
The sales price per loaf of GF bread is $6.80 regardless of the option chosen.
Fixed costs: one-off cost from introducing TQM | Semi-variable costs: additional electricity costs | Variable costs: additional gluten-free flour overtime pay for staff |
|---|---|---|
$4000 | $2000 + an additional $0.20 per loaf baked | $0.80 per loaf, $0.40 per loaf |
Question 2 [a] [Explanation]
This question asks you to identify two features of an own label brand. An own label brand is a product created for a retailer by a supplier or manufacturer to be sold under the retailer's own name or label. These products are commonly sold at a price below the supplier's or manufacturer's own branded price.