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7115 w14 in 22 .pdf



Original filename: 7115_w14_in_22.pdf
Title: 11_7115_22_2014_98471.indd
Author: karen

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Cambridge International Examinations
Cambridge Ordinary Level

7115/22

BUSINESS STUDIES
Paper 2

October/November 2014

INSERT
1 hour 45 minutes
*2965916199-I*

READ THESE INSTRUCTIONS FIRST
This Insert contains the case study material.
Anything the candidate writes on the Insert will not be marked.

This document consists of 3 printed pages and 1 blank page.
DC (KN/CGW) 98471
© UCLES 2014

[Turn over

2
ACE Engineering (ACE)
ACE is a public limited company located in country Z. It makes large ovens which are sold mainly to
restaurants and hotels in many different countries.
The main components used to make the ovens are metal. There are also rubber components which
fit around the oven doors and electrical components for the temperature controls. Only the electrical
components are imported. All other components are purchased locally.
ACE employs 200 production workers in its factory and 50 office workers. A high proportion of the
workforce leaves each year and the Human Resources department has frequently to recruit and train
new employees. All employees are members of a trade union. The directors of ACE have held meetings
to discuss how to manage the employees effectively. They want to improve the employees’ motivation.
The managers expect workers to follow instructions and the workers are told they will be dismissed if
they do not follow orders.

Appendix 1
Financial information on ACE Engineering
2012
Sales revenue
Gross profit
Expenses
Capital employed

$ 200 m
$ 150 m
$ 130 m
$ 100 m

Gross profit margin
75%
Net profit margin
10%
Return on capital employed (ROCE) 20%

2013
Sales revenue
Gross profit
Expenses
Capital employed

© UCLES 2014

7115/22/INSERT/O/N/14

$ 250 m
$ 200 m
$ 160 m
$ 120 m

3
Appendix 2
Information about country Z
The main industries in country Z were agriculture, rubber plantations and iron ore mining. Towns and
cities have expanded as many people have moved from farms to find jobs that pay higher wages.
Consumer incomes are rising rapidly in country Z.
Pattern of employment
1988

2013

Tertiary
10%

Tertiary
20%

Secondary
20%

Primary
40%
Primary
70%
Secondary
40%

Appendix 3
To:
From:
Date:
Re:

Operations Manager of ACE
Managing Director of ACE
4 October 2014
Efficiency improvements

We need to be efficient to remain competitive. We should be using lean production methods.
All our competitors use lean production methods such as just-in-time and waste reduction. Please
research this for me and let me know what you think.

© UCLES 2014

7115/22/INSERT/O/N/14

4
BLANK PAGE

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local
Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.

© UCLES 2014

7115/22/INSERT/O/N/14


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