~ST CODE 02233010

FORM TP 2013229 MAY/JUNE 2013

CARIB BE . ~ a:rrrrr:rr'l A I I 0 N r c 0 UNCI L
CARIBBEAN ADVANCED PROFICIENCY EXAMINATION®
MANAGEMENT OF BUSINESS

Unit 2- Paper 01
1 hour 30 minutes

( 28 MAY 2013 (a.m.))

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of 45 items. You will have 1 hour and 30 minutes to answer them.
2. In addition to this test booklet, you should have an answer sheet.
3. Do not be concerned that the answer sheet provides spaces for more answers than there are
items in this test.
4. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best.
5. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

Which of the following actions CANNOT be taken by a trade union?

Sample Answer
(A) Picket
(B)
(C)
Strike
Go slow
®®©e
(D) Lock out

The best answer to this item is "Lock out", so answer space (D) has been shaded.

6. If you want to change your answer, be sure to erase it completely before you fill in your new
choice.
7. When you are told to begin, turn the page and work as quickly and as carefully as you can.
If you cannot answer an item, omit it and go on to 'the next one. Your score will be the total
number of correct answers.
-
i iiiii 8. You may do any rough work in this booklet.

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i iiiii
9. You may use silent non-programmable calculators to answer questions.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

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Copyright© 2011 Caribbean Examinations Council
All rights reserved.
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1. Which of the following is a disadvantage 5. Which of the following types of control is

of job production? NOT a strategy in production?

(A) Workers tend to be less motivated (A) Design .

because of repetition of work. (B) Quality
(B) There is a large stock of unfinished (C) Materials
goods at each stage of the (D) Employee
process.
(C) Labour costs are high because
production tends to be labour 6. Total Quality Management can be BEST
intensive. defined as
(D) It is not possible to offer a wide
variety of goods to meet (A) a technique for measuring quality
consumers' needs. (B) a philosophy for improving worker
quality
(C) a support for the quality control
2. Which of the following is considered a department
quantitative method of forecasting? (D) an application of Herzberg's
hygiene factors
(A) Market survey
(B) Moving average
(C) Panel consensus 7. By introducing a new design in an effort
(D) The delphi method to make a product more efficient while
maintaining or increasing consumer appeal,
a manufacturer is actually addiQg
3. The strategy of selecting the best
practices against which the organization's (A) cost
performance is compared is known as (B) value
(C) . viability
(A) outsourcing (D) competition
(B) benchmarking
(C) continuous improvement
(D) total quality management 8. An electronics manufacturer is faced with
a number of options regarding the future
of the business. A decision tree is LEAST
4. A forecasting technique which pools the likely to help him to determine
opinions of a small group of experts is
called a (A) whether or not to relocate the plant
(B) the viability of an advertising
(A) consumer survey campaign
(B) delphi method (C) whether or not a product should be
(C) jury of executives launched
(D) sales force composite (D) the success or failure of a
competitor's product

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Item 9 refers to the diagram below.

I
Labour Supplies

Mach~~ /nmterials

~
9. What type of layout facility is illustrated in the diagram above? ,

(A) Process
(B) Product
(C) Cellular
(D) Fixed position

10. Critical Path Analysis as a decision-making 13. The Riverside Resort and Spa is considering
tool is MOST useful when the purchase of a bus. The mileage covered
by the bus over the past 6 years is as follows:
(A) there is only one activity
(B) project activities are clearly defined Year 1 Mileage
(C) scheduling and controlling large
projects 1 2 000
(D) scheduling and controlling small 2 3 000
projects 3 3 800
4 3 200
5 2 500
11. The perceived quality of a product ts
6 I 800
measured by
The forecasted mileage for year 7, using a
(A) the producer's standards
2-year moving average, is
(B) the features of the product
(C) conformity to customers' expecta-
(A) 1 800
tions
(B) 2 000
(D) conformity to general production
(C) 2 150
standards
(D) 4 300

12. Which of the following is the MOST

appropriate method formeasuringefficiency
of production in a capital-intensive industry?

(A) Output per machine,·

(B) Sales per employee
(C) Profit per employee
(D) Output per employee . ·

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14. Which of the following types of layout is MOST suitable for large, bulky projects such as ships
and buildings?

(A) Office
(B) Product
(C) Process
(D) Fixed position

Item 15 refers to the following -diagram of a basic stock control chart with featured regions labelled
I, II, III and IV.

90 _...._ III Maximum

stock level
80

-== 70

--
0
~
60
~ _...._IV
-.s
~
,.!;1d
CJ
50

40
c:l.l
30

20 Minimum
stock level
10 I
~.-:
'' '
' ''
0 1 2 3 4 5 6 7 8
Time (Months)

15. The 'lead time' is represented by

(A)
(B) II
(C) III
(D) IV

16. Which of the following is NOT a pricing strategy?

(A) Price skimming

(B) Penetration pricing
(C) Contribution pricing
(D) Distribution based pricing

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17. One primary component ofthe promotional 22. The pricing method that uses the buyer's
miX IS point of view regarding the worth of product
is called
(A) information
(B) word of mouth (A) cost-plus
(C) sales promotion (B) going-rate
(D) potential customers (C) break-even
(D) value-based
(

18. The collection of businesses ano products

that make up the company is known as 23. Megastar Ltd displays samples of muffins,
near the deli counter, for shoppers t<Haste.
(A) strategic analyses This is an example of
(B) portfolio analyses
(C) business portf~lios (A) creative selling
(D) strategic obje6tives (B) personal selling
(C) sales promotion
(D) event promotion
19. The expression 'consumer buying
behaviour' refers to the
24. All businesses are affected by a number
(A) business of forces in the environment. Which of
(B) target market the following are forces in the micro-
(C) final customers environment?
(D)
.
market segment
I. Customers .
II. Government
20 . A producer who del iberately restricts the Ill. Competitors
number ofdealers is said to be implementing
which of the following types of strptegies? (A) I and II only
(B) I, and
' .
III only
(A) Multiple channel (C) II and III only
(B) Market distribution (D) I, II and Ill
(C) Intensive distribution
(D) Selective distribution
25. Nintendo Game S~op has launched the latest
video game. To which of the following
21. Which ofthe following BEST describes the segments does this offer appeal?
correct order of the stages in the life cycle
of a product? (A) Benefit
(B) Individual
(A) lntroduc,~ion, growth, mat_u rity, (C) Behavioural
saturation, declil}e (D) Age and life.-cycle
(B) Introduction, maturity, growth,
saturation, decline
(C) Introduction, growth, saturation,
maturity, decline
(D) Introdu~tion, saturation, growth,
maturity, decline

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17. One primary component ofthe promotional 22. The pricing method that uses the buyer's
m1x 1s point of view regarding the worth of product
is called
(A) information
(B) word of mouth (A) cost-plus
(C) sales promotion (B) going-rate
(D) potential customers (C) break-even
(D) val qe-based

18. The collection of businesses ano products

that make up the company is known as 23. Megastar Ltd displays samples of muffins,
near the deli counter, for shoppers to taste.
(A) strategic analyses This is an example of
(B) portfolio analyses
(C) business portf~lios (A) creative selling
(D) strategic obje6tives (B) personal selling
(C) sales promotion
(D) event promotion
19. The expression 'consumer buying
behaviour' refers to the
24. All businesses are affected by a number
(A) business of forces in the environment. Which of
(B) target market the following are forces in the micro-
(C) final customers environment?
(D)
.
market segment
I. Customers -
II. Government
20. A producer who deliberately restricts the Ill. Competitors
number ofdealers is said to be implementing
which of the following types of str,ategies? (A) I and II only
(B) I, and
''
III only
(A) Multiple channel (C) II and III only
(B) Market distribution (D) I, II and Ill
(C) Intensive distribution
(D) Selective distribution
25. Nintendo Game S~op has launched the latest
video game. To which of the following
21. Which ofthe following BEST describes the segments does this offer appeal?
correct order of the stages in the life cycle
of a product? (A) Benefit
(B) Individual
(A) Introduc.! ion, growth, maturity, (C) Behavioural
saturation, declil)e (D) Age and life.-cycle
(B) Introduction, maturity, growth,
saturation, decline
(C) Introduction, growth, saturation,
maturity, decline
(D) Introdu~tion, saturation, growth,
maturity, decline

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26. Three MAIN factors taken into consideration 30 . Which of the following features are
when designing a sampling plan are LIKELY to influence the choice of a
distribution channel?
(A) survey date, time and method of
collecting data I. Wide market coverage
(B) sample unit, sample size and II. Access to a firm's product
sampling procedure III. Recognition of a firm's product
(C) sample unit, research instrument
and survey data (A) I and II only
(D) type of survey, metnod of data (B) I and III only
analysis and time frame (C) II and III only
(D) I, II and III

27. The pricing method where a firm bases its

price on the price set by its competitors is 31. Which of the following is a LIKELY
called component of a market analysis section of
a business plan?
(A) market pricing
(B) going rate pricing (A) Start-up plans
(C) consumer-based pricing (B) Source of funds
(D) competition-based pricing (C) Consumer needs
(D) Cost of production

28. A small 'start-up' hair-dressing operation

wants to reach its target market in a small 32. Which ofthe following is NOT an advantage
town in the shortest possible time. Which of a planned economy?
of the following methods of advertising is
MOST appropriate? (A) Allowance for long-term planning
(B) . State support for consumer needs
(A) Fliers (C) Very slow and bureaucratic decision
(B) Newspapers making
(C) Beauty magazines (D) Avoiding duplication and wasteful
(D) Business catalogues competition

29. In addition to selling appliances, Delmar's 33. Entrepreneurship can BEST be defined as
Furniture Ltd offers delivery, installation
and repair services, warranties, showrooms (A) accessing capital
and waiting areas. Which of the following (B) making profits at all cost
types of product BEST describes this offer? (C) identifying the factors of production
(D) using scarce resources to establish
(A) Core business entities
(B) Actual
(C) Hybrid
(D) Augmented

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34. Which of the following is a primary 37. Which of the following is typical of
advantage of small business to the the assistance given by small business
Caribbean region? associations to small firms?

(A) Creating employment I. Opportunity for training , '

(B) Serving niche markets II . Approval of loan application to the
(C) Improved standard of living bank
(D) Improve'd management training III. Expert advice on specific areas of
weaknesses

Item 35 refers to the following information. (A) I and II only

(B) II and III only
Kelly, a small business operator, was (C) I ~nd III only
advised that based on the nature of her (D) I, II and III
product she should focus on a 'niche
marketing' strategy.
Item 38 refers to the following information.
35. Niche marketing may BEST be defined as
the process of Mr Mike, a sole trader, was advised by
his friend to use the 'penetration pricing'
(A) targeting the entire market strategy for his new pr_oduct.
(B) exploiting a segment of a larger
market 38. The term 'penetration pricing' refers to
(C) tailoring products to individual
consumers (A) adding a percentage of profits to
(D) selling different products to each the total cost
consumer (B) reducing the price of a product to
attract c,ustomers
(C) following the pricing strategies of
Item 36 refers to the following information. the market leader
(D) charging more than competitors for
John, the owner of a small business, has a status product
included a business environment analysis
as a component of his business plan.
39. One possible negative impact of
36. Which of the following is LEAST likely globalization on small firms is that small
to be a part of his business environment firms may
analysis?
(A) have better access to advance
(A) Location technology I
(B) Target market (B) be able to create linkages with
(C) Record keeping larger firms
(D) Customer needs (C) experience more business
opportunities
(D) be squeezed out of business due to
lack of res9urces

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40. Which of the following are skills required 43. Delectable Treats Ltd, a small bakery,
for the small business management? sells its products through its own retail
outlet. Which of the following distribution
I. Leadership channels is Delectable Treats using?
II. Record keeping
Ill. Market research (A) Agent
(B) Direct
(A) I and II only (C) Indirect
(B) I and III only (D) Multiple
(C) II and III only
(D) I, II and III
44. A 'patent' is considered a strategic asset to
a business' because it
41. One advantage of electronic commerce is
that it (A) protects innovative new products
(B) advertises innovative new products
(A) reduces production time (C) reduces the cost of innovative new
(B) increases printing and mailing costs products
(C) pro v ides wide access to new (D) allows other businesses to copy
markets innovative new products
(D) limits the number of potential
consumers
Item 45 refers to the following scenario.

42. Which of the following has MAINLY Shelly has recently acquired a large sum of
facilitated the entry of Caribbean money. She is contemplating establishing
entrepreneurs into international financial her own mini -mart or purchasing an
markets? existing one which is for sale in her home
town.
(A) Globalization
(B) Market research 45. One risk that Shelly might encounter in
(C) Economies of scale purchasing an existing business is
(D) Research and development
(A) shorter start-up time
(B) poor reputation of the business
(C) the need to register the business
(D) existing structure for the business

END OF TEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

022330 10/CAPE 2013