Page 2 - CIMA OCS August 2018 Day 1 Suggested Solutions
P. 2
CIMA AUGUST 2018 – OPERATIONAL CASE STUDY
Question Response
What is Thomas Fine Teas’ supplier • Uses a range of growers in different countries (p11)
strategy? • As yet does not have any direct supply agreements
(p11)
What production strategy does • Holds inventory of tea leaves but blends them and make
Thomas Fine Teas have? boxes of tea bags in response to customer orders (p12)
What sales channels does Thomas • Direct to 4 corporate customers (p13)
Fine Teas sell via? • Indirect to supermarkets and wholesalers. (p13)
What pricing approach does Not told much except that
Thomas Fine Teas use? • TFT can charge higher than average prices (p13) and
that
• pricing structures only allow supermarkets to make a
small margin (p13)
What approach does TFT take to • Traditional methods including TV and media advertising
promotion? (p13)
What type of organisational • Functional
structure does Thomas Fine Teas • Some wide spans of control (p14)
have?
How does TFT set budgets? • Annually
• Looks like it is incremental
• Have participation (p19)
Which products are forecast to • Black tea – everyday blend (p19)
generate the highest gross profit?
Which products have the highest • Black tea – premium blend (p19)
gross profit margins?
What is the typical loss by volume • 5% (p21)
when making tea bags
How are overheads absorbed? • Direct labour hours (p23)
How profitable was Thomas Fine • D$14.8m profit
Teas in 2018?
Did revenue increase or decrease • Increased 5.4% - not told why
in 2018? Why?
44 KAPLAN PUBLISHING
