Page 244 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 4 Operations management

Exam-style case study

Sunshine Foods
Appendix 1
Sunshine Foods manufactures a range of breakfast
Extract from minutes of the most recent meeting of the Board of
cereals. It purchases its ingredients from farms in
Directors
Directors
Country Y. Sunshine uses batch production for all
of its products. However, the directors of Sunshine
have agreed to the introduction of fl ow production Minute 3.1 The directors agreed to an investment
of $500,000 over the next two years to
methods for its most popular products. See
finance new flow production methods.
Appendix 1.
The company has achieved steady growth over the
past fi ve years and this has meant that it has been
able to benefi t from economies of scale. Appendix 2

The company has developed a new chocolate Extract from report prepared by the Operations Manager
fl avoured cereal which they have called Choco-pops.
The company needs to improve productivity. This may be achieved
The Marketing Manager has produced a break-even
through:
chart for Choco-pops, based on cost information
supplied by the Operations Department and a ■ increasing the frequency and quality of training for
proposed selling price of $1.50. production workers

The Operations Manager, who recently joined ■ improving worker motivation, perhaps through non-fi nancial
242 Sunshine from one of its main competitors, wants incentives
to introduce a number of changes to Sunshine’s
■ investing in new technology.
operations to improve productivity. He has
suggested to the Operations Director a number of
ways of achieving productivity improvements (see Appendix 3
Appendix 2) and has also produced a report outlining
Email message from Core Supermarkets
the case for the introduction of just-in-time inventory
management. We have recently received complaints from some of our
customers about the quality of cereal products manufactured by
The Marketing Manager is concerned about a
your company. Some customers have returned boxes of cereal
recent email received from one of Sunshine’s major
purchased from our supermarkets claiming that the product
customers. See Appendix 3.
does not taste very nice, or contains material that does not
look like cereal! If these complaints continue then we will have
no option but to stop stocking your products and look for an
alternative supplier.