Business 9609/31 May/June 2025: question paper and mark scheme

Mark scheme

1 Analyse two advantages to WS of using an environmental audit. 8 Level AO1 Knowledge and AO2 Application AO3 Analysis understanding 2 marks 4 marks 2 marks 2 3–4 marks Developed analysis • Developed analysis that identifies connections between causes, impacts and/or consequences of two points. • Developed analysis that identifies connections between causes, impacts and/or consequences of one point. 1 1–2 marks 1–2 marks 1–2 marks • Knowledge of two • Application of two Limited analysis relevant points is relevant points to a • Limited analysis that identifies connections used to answer the business context. between causes, impacts and/or consequences question. • Application of one of two points. • Knowledge of one relevant point to a • Limited analysis that identifies connections relevant point is business context. between causes, impacts and/or consequences used to answer the of one point. question. 0 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. Note • Only reward advantages. • If more than two advantages are referred to, reward the best two. • L2AN (3 marks) is possible for just one point made. • All annotation ( ) should be in the left margin. 1 AO1 Knowledge and understanding Definition of relevant terms (max K 1 mark) • Environmental audit: measuring the environmental impact of a business and how sustainable its activities are. • Knowledge of CSR. • Possible advantages include: • Improves governance and decision making. • Highlights direction for improvements. • Enables smart target setting. • Enables stakeholder expectations to be met. • Improves transparency. AO2 Application Limited application, applies knowledge to WS once. Developed application, + applies knowledge to WS twice. Max one for application of the first benefit and max one for application of the second benefit. Application is making use of relevant case information not just repeating it. • Constantly changing footwear markets. • Jon keen for research on changes connected to CSR. • Increasing demand for non-leather products. • Growing consumer awareness of need for sustainable supply chains. AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. • Improved decision making can lead to more efficiency, lower costs, higher profits, lower risks. • Highlighting routes for improvement can lead to change and improved CSR. • Smart target setting enables positive clear change and monitoring • Stakeholders’ expectations being met can improve e.g. image, reputation, sales, employee motivation/commitment. • Improved transparency can attract more business as increasingly decisions are made based on ethical factors. • Enables company culture to increase social and environmental responsibility resulting in more satisfied employees and therefore lower labour turnover. Accept all valid responses

Mark scheme

2 Analyse two ways that enterprise resource planning (ERP) could improve the efficiency of WS. 8 Level AO1 Knowledge and AO2 Application AO3 Analysis understanding 2 marks 4 marks 2 marks 2 3–4 marks Developed analysis • Developed analysis that identifies connections between causes, impacts and/or consequences of two points. • Developed analysis that identifies connections between causes, impacts and/or consequences of one point. 1 1–2 marks 1–2 marks 1–2 marks • Knowledge of two • Application of two Limited analysis relevant points is relevant points to a • Limited analysis that identifies connections used to answer the business context. between causes, impacts and/or consequences question. • Application of one of two points. • Knowledge of one relevant point to a • Limited analysis that identifies connections relevant point is business context. between causes, impacts and/or consequences used to answer the of one point. question. 0 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. Note • If more than two ways that ERP could improve efficiency are referred to, reward the best two. 2 AO1 Knowledge and understanding Definition of relevant terms (max K 1 mark) • ERP: software integrating information from all business functions, supply, production, marketing and HR. • Efficiency measures the ratio of inputs to outputs. Possible benefits include • Reduction of costs and waste. • Better control of inventory. • More accurate costing and pricing decisions. • Higher capacity utilisation. • Faster response to change. AO2 Application Limited application, applies knowledge to WS once. Developed application, + applies knowledge to WS twice. Max one for application of the first benefit and max one for application of the second benefit. Application is making use of relevant case information not just repeating it. • Current use of IT. • Keri begun research into ERP. • Batch production on assembly lines. • Shoes sold into three constantly changing markets. AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. • Reducing costs and waste increases profits. • Better inventory control reduces costs, aids planning and communication with suppliers and customers. • More accurate costing/pricing enables customer specific pricing and increases sales and goodwill. • Higher capacity utilisation reduces average costs and increases profitability. • Faster response to change enables better purchasing materials, production methods and higher sales. Accept all valid responses

Mark scheme

3(a) Using the data in Table 1.1, calculate the average monthly labour productivity for January to May 2025. 2 Average monthly labour productivity = Total output / Number of employees OR 90 000 / 480 (1) 187.5 (2) OR 188 (2) 3(b) Using the data in Table 1.1, calculate the percentage of output that failed to meet quality standards for January to 2 May 2025. Percentage failing to meet quality standards / output × 100 OR 15 000 / 90 000 × 100 (1) 16.67% OR 16.7% OR 17% (2) Accept 16.66% and 16.6% (2) 3(c) Evaluate the best approach for WS to improve the performance of its production employees. 12 Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation and understanding 2 marks 2 marks 6 marks 2 marks 3 5–6 marks Developed evaluation in context • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context. 2 2 marks 2 marks 2 marks 3–4 marks Developed Developed Developed Developed evaluation knowledge of application of analysis • A developed judgement/conclusion relevant key term(s) relevant point(s) to that identifies is made. and/or factor(s) is the business connections • Developed evaluative comments used to answer the context. between causes, which balance some key question. impacts and/or arguments. consequences. 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key of relevant point(s) that identifies • A judgement/conclusion is made term(s) and/or to the business connections with limited supporting factor(s) is used to context. between causes, comment/evidence. answer the question. impacts and/or • An attempt is made to balance the consequences. arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable No creditable response. response. response. response. 3(c) Indicative content AO1 Knowledge and understanding Limited knowledge will be demonstrated through knowledge of measures of performance. Developed knowledge + will be demonstrated through knowledge of measures of performance and knowledge of how to improve performance of production employees. • Employee performance measured by productivity, absenteeism, labour turnover, accident rates, wastage/product rejection rates. • HRM components: motivation, management styles. • Reference to theories on motivation including: Taylor, Mayo, Herzberg and Maslow • Possible techniques to improve performance include: • Providing better equipment and training. • Appropriate motivation techniques for employees. • Realistic informed target setting. • Bonus payments for production/waste targets. • Facilitating employee participation in decision making and/or working arrangements. AO2 Application Limited application, applies knowledge to WS once. Developed application, + applies knowledge to WS twice. • Batch production on assembly lines. • Information from Table 1.1 showing employee performance measures. • Increase in number of units failing to meet quality standards. • Increase in labour turnover. • Increase in number of accidents. • Use of bullet points on employee performance. • Wages 10% more than industry average. • Complaints about production targets. • On-the-job training. • Limited opportunities for career progression. • Strict management style. 3(c) AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis Chains of reasoning developing how techniques will impact performance: • Bonuses for achievement of production targets will provide a financial incentive for production employees encouraging them to be more focused on increasing output and therefore increasing productivity. • Off the job training could make employees feel more valued and increase skills therefore improving motivation and quality of work which will reduce the number of defects and lead to higher output. • Empowering workers to make more decisions about their working day will reduce the conflict caused by the current strict management style and have a positive impact on motivation therefore resulting in a reduction in labour turnover. • Possible reasons for decreased performance include: • Little training ‘expected to learn on job’, non-participation in decision making ‘follow instructions’, complaints about targets. • Limited opportunities for progression. • All measures in Table 1.1 show decreasing performance. • Pay does not seem to be a factor ‘paid 10% more than industry average’. AO4 Evaluation Limited evaluation – limited supported judgement and/or a weak attempt at evaluative comment. Developed evaluation – supported judgement and/or reasonable evaluative comment. Developed evaluation in context – supported judgement in context and/or reasonable evaluative comment in context. Justified recommendations based on analysis include: • More and better training for employees and supervisors. • More participation in decision making. • More freedom to carry out tasks as employees decide. • More motivation techniques to be applied e.g. regular appraisals, non-financial motivators. • Clear realistic targets set, possibly with bonuses for meeting them. • Regular meetings with employees and/or their representatives. • Balanced argument on the advantages and disadvantages of a given approach. • Weighting of advantages and disadvantages of a given approach. Accept all valid responses

Mark scheme

4(a)(i) Using the data in Table 1.2, calculate the average seasonal variation for Quarter 4. 2 Average seasonal variation = Total seasonal variation for Quarter 4 2022–3 / 2. OR 1.02 + 0.32 = 1.34 (1) 1.34 / 2 = ($)0.67 (million) (2) 4(a)(ii) Jon has calculated the trend for 2025 Quarter 4 as $21.41 million. 2 Using your answer to (a)(i), calculate forecast sales for 2025 Quarter 4. Forecast revenue = forecast trend plus average seasonal variation for that quarter OR 21.41 + 0.67 (1) 21.41 + 0.67 = ($)22.08 (million) (2) OFR based on 4(a)(i) 4(b) Evaluate whether time series analysis is sufficient to allow WS to make decisions to achieve its marketing 12 objective. Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation and understanding 2 marks 2 marks 6 marks 2 marks 3 5–6 marks Developed evaluation in context • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context. 2 2 marks 2 marks 2 marks 3–4 marks Developed Developed Developed Developed evaluation knowledge of application of analysis • A developed judgement/conclusion relevant key term(s) relevant point(s) to that identifies is made. and/or factor(s) is the business connections • Developed evaluative comments used to answer the context. between causes, which balance some key question. impacts and/or arguments. consequences. 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key of relevant point(s) that identifies • A judgement/conclusion is made term(s) and/or to the business connections with limited supporting factor(s) is used to context. between causes, comment/evidence. answer the question. impacts and/or • An attempt is made to balance the consequences. arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable No creditable response. response. response. response. 4(b) Indicative content AO1 Knowledge and understanding Limited knowledge will be demonstrated through knowledge of time series analysis OR knowledge of other factors Developed knowledge + will be demonstrated through knowledge of time series analysis and knowledge of how it contributes to decision making or knowledge of other factors influencing decision making L1 all skills if no clear K of what TSA is. Understanding of Time Series Analysis including its advantages (quantitative, based on actual data, factors in seasonality) and disadvantages (circumstances may change making prediction inaccurate, false sense of accuracy, relies on accurate data) • Knowledge of qualitative sales forecasting. • Knowledge of marketing planning and its elements: objectives, resources, research, marketing mix. • Role of market research and market analysis in setting marketing objectives and making decisions AO2 Application Limited application, applies knowledge to WS once. Developed application, + applies knowledge to WS twice. • WS three markets: fashion, leisure, work. • Use of information in Table 1.3. • WS products high price, value for money. • Jon’s objective is to increase annual sales by 5% p.a. • WS sells to major retailers and independents. • Increasing demand for non-leather/sustainable shoes. • Jon recommended preparing an environmental audit. 4(b) AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis • Sales forecasting enables minimum cost distribution. • Sales forecasting enables objective to be set and planned for. • Sales forecasting may ignore changes e.g. new product lines, new marketing mix and therefore be inaccurate. • Objective of increasing sales requires account to be taken of costs, not just sales. • Changing nature of markets requires accurate forecasting (qualitative and quantitative) for sales targets to be met. • TSA data in Table 1.2 is for all products. Table 1.3 indicates there are differences in each product/market making the data inaccurate for each. • Table 1.3 gives important information which marketing planning can use AO4 Evaluation • Considered judgement based on argument. • Sales forecasting important but other elements need to be considered for objectives to be met e.g. production capacity, appropriate quality of product, appropriate marketing mix. • Objective of increasing sales is imprecise. • Accuracy of forecasting relies on accurate methods and data generated. • Objective is confused – ‘increase sale without entering new markets’ but Jon wants research into non-leather products. Are these a ‘new market’? or not? This needs clarifying before setting a marketing plan. • Any new products will significantly alter sales forecasts, and in a constantly changing market forecasts on their own may not be accurate. • Information on % sales revenue from different products, forecast market growth and strength of competition must be taken into account when forecasting sales, not just rely on TSA. • Forecasting sales must apply to the three different markets, not just overall sales. Accept all valid responses

Mark scheme

5 Evaluate the most effective method WS could use to improve investor return. 12 Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation and understanding 2 marks 2 marks 6 marks 2 marks 3 5–6 marks Developed evaluation in context • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context. 2 2 marks 2 marks 2 marks 3–4 marks Developed Developed Developed Developed evaluation knowledge of application of analysis • A developed judgement/conclusion relevant key term(s) relevant point(s) to that identifies is made. and/or factor(s) is the business connections • Developed evaluative comments used to answer the context. between causes, which balance some key question. impacts and/or arguments. consequences. 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key of relevant point(s) that identifies • A judgement/conclusion is made term(s) and/or to the business connections with limited supporting factor(s) is used to context. between causes, comment/evidence. answer the question. impacts and/or • An attempt is made to balance the consequences. arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable No creditable response. response. response. response. 5 Indicative content AO1 Knowledge and understanding Limited knowledge will be demonstrated through knowledge of investor return. Developed knowledge + will be demonstrated through knowledge of investor return and knowledge of how to improve investor return. • Identification of investors with shareholders • Understanding of investor return measures: dividend cover (Profit for year/annual dividend), earnings (net profit), dividend per share, dividend yield (dividend per share/market share price), P/E ratio • Knowledge that shares may be held for long term or short-term reasons. • Directors decide on dividends. • Methods to increase investor return: - Increase revenue relative to costs - Decrease costs AO2 Application Limited application, applies knowledge to WS once. Developed application, + applies knowledge to WS twice. • Nature of CP’s products: medium to high price, value for money leather footwear. • Shareholders take an active interest. • Recognition of changes in investment indicators in last three years (Table 1.4). • Operating profit has risen • EPS has risen • Share price has increased • P/E ratio has increased • Shareholders intend to use the AGM to seek methods to increase their returns. • Possible changes cited in case: environmental audit, ERP research, marketing plan, increased employee performance. 5 AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis • WS has plans for investing in ERP which would increase efficiency resulting in a reduction in unit costs and therefore an increase in profit margins. With increased operating profit there would be more profits available for distribution to shareholders as dividends. Effect of possible changes cited in the case: • Strategies to increase profit including investing in ERP, marketing and improving the performance of employees will make WS more attractive to investors resulting in an increase in the share price and therefore a potential capital gain for shareholders. • P/E ratio has risen indicating that shareholders are receiving less value for their shares, but it could mean there is an expectation for future growth. • Possibility of producing products increasingly demanded by the market so revenue and profit increase. • Marketing plan likely to increases sales and profits. • Employee performance increases, lowering costs and raising profit. • Shareholders take an active interest so likely to engage with managers on implementation. Other measures WS might introduce to raise investor return could include: • More machinery/automation to reduce labour costs. • Price increases to raise markup. • Cutting spending where this can be done so lowering costs. • Focusing a marketing plan on highest profitable products. 5 AO4 Evaluation Limited evaluation – limited supported judgement and/or a weak attempt at evaluative comment. Developed evaluation – supported judgement and/or reasonable evaluative comment. Developed evaluation in context – supported judgement in context and/or reasonable evaluative comment in context. • Considered judgement based on argument • Short term v long term • Changes in profit ratio in last two years suggest that management strategies are working and indicate that returns to shareholders will continue to increase • Changes being considered/implemented may increase sales and profits and sales. Directors would need to actively use these increases to pay more dividends • Effect of these changes is to make more money available for investors BUT will the cost of implementation actually lead to increased profit? Will WS increase dividends? Will the changes increase the share price? • What timescales are the changes going to occupy? • The changes that benefit investors will also be beneficial to WS, its managers and employees, so high probability of them succeeding. Accept all valid responses