Page 236 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 4 Operations management

Revision checklist Exam practice questions

● Quality is an important business concept 1 Zebtech produces components used in the manufacture of
which is concerned with producing medical equipment. Component Y is used in heart surgery.
goods and services that meet consumer Every unit of Component Y is inspected before despatch to
expectations. customers to make sure it satisfi es quality standards. The
● Quality is important to businesses because it following data has been collected about Component Y for
helps to reduce costs and improve marketing 2011 and 2012.
opportunities such as premium pricing and
brand development. 2011 data 2012 data
● Businesses can use quality control processes Total output 1,800 units 2,150 units
and quality assurance processes to achieve
% defective 0.5% 2%
desired quality standards.
Number of Component Y returned 4 2
by customers as faulty
Table 17.1 Data about Component Y
a What is meant by ‘quality standards’? [2]

b Calculate the actual number of defects in 2012. [2]
c Identify and explain two disadvantages of Zebtech’s
process of quality control. [4]
d Identify and explain two ways Zebtech might reduce
the number of defectives. [6]
234
e Do you think the management of Zebtech should be
worried about the data relating to the production of
Component Y? Justify your answer. [6]

2 PP manufactures digital cameras. The company employs
workers to inspect the quality of fi nished products before
they are despatched to customers. The quality control
inspectors check a sample of all output.

The senior management of PP are concerned about the
level of customer complaints. The company has sold
46,000 digital cameras in the past six months. It has
received complaints from 1.5% of customers about
the poor quality of its products. Senior managers are
considering introducing a process of quality assurance.
a What is meant by ‘quality’? [2]
b Calculate the number of customer complaints
received by the company over the past six months. [2]
c Identify and explain two reasons why quality is
important to fi rms such as PP. [4]
d Identify and explain two possible causes of the
increase in customer complaints about the poor
quality of PP’s products. [6]
e Do you think senior managers of PP should introduce
quality assurance? Justify your answer. [6]
Total available marks 40