Physics Practice Marks
Physics Practice Marks
Markscheme
November 2018
Business management
Higher level
Paper 2
25 pages
–2– N18/3/BUSMT/HP2/ENG/TZ0/XX/M
The markbands and assessment criteria on pages 3–5 should be used where indicated in
the markscheme.
0 The work does not reach a standard described by the descriptors below.
Criterion B: Application
This criterion addresses the extent to which the candidate is able to apply the given concepts
and the relevant business management content (theories, techniques or tools, depending on
the requirements of the question) to his or her chosen real-world organization(s). The real-
world organization(s) must not be the organization featured in the prescribed case study
for paper 1.
Criterion D: Structure
This criterion assesses the extent to which the candidate organizes his or her ideas with
clarity, and presents a structured piece of writing comprised of:
an introduction
a body
a conclusion
fit-for-purpose paragraphs.
Section A
1. (a) Describe one limitation of a break-even analysis. [2]
Accept any relevant description. There is no need for further explanation of the
exact impact on the break-even point.
Award [1] for each relevant identification / list of one limitation of the model.
(b) Calculate:
(i) the number of dolls that DD needs to sell to reach $4000 level of profit
(show all your working); [2]
OR
20X = 14 000
Award [1] for working and [1] for the correct answer.
(ii) the capacity utilization rate at break-even quantity for DD for the first year of
operation (show all your working); [2]
Fixed costs
Break-even quantity =
Contribution per unit
10 000
=
$50 – $30 20
= 500 dolls
500 dolls
Capacity utilization rate = = 0.55 100 = 55.55 %
900 dolls
500
Capacity utilization= 100 = 55.55 %
900
Do not credit for using the formula as it is given. Do not fully credit if the
figure is not expressed in %.
Award [1] for correct working, which includes the calculations of the break-
even point and [1] for the correct answer in %. Award up to a maximum of [2].
If only the correct breakeven is present, then award [1] only if working is shown.
(iii) The profit or loss in the first year if DD sells 400 dolls (show all your
working). [2]
Do not credit for the calculation of the break-even point but allow OFR even
if correct. It is application of the MOS-BE formula which gets the mark for
workings.
$(2000) = a loss
Award [1] for correct working and [1] for the correct answer. Award up to a
maximum of [2].
(c) Assuming that the quantity of dolls to be sold in the second year is 550 and costs
remain unchanged, calculate the price per doll that DD would need to charge to
make a $6500 profit. [2]
X = $60
Award [1] for working and [1] for the correct answer.
Award [1] for a basic definition that conveys partial knowledge and
understanding.
Award [2] for a full definition that conveys knowledge and understanding similar
to the answer above. – reference to repayment period is not necessary for full
marks.
(i) construct a fully labelled balance sheet for Papel for the end of October
2018; [5]
000s 000s
Fixed assets
Net fixed assets 60
Current assets
Cash 3
Debtors 12
Stock 5
Total current assets 20
Current liabilities
Creditors 20
Total current liabilities 20
Net current assets (working capital) 0
Total assets less current liabilities 60
Long-term liabilities 20
Net assets 40
Financed by:
Share capital 26
Accumulated retained profit 14
Equity 40
N.B.: if the candidate does not follow the IB prescribed format, award a
maximum of [3].
Allow OFR.
[0]
The B/S does not reach a standard described below.
[1–2]
The B/S is not accurately constructed, and/or the calculations within and
between the various components are not presented or largely incorrect.
However, there is limited evidence of a general understanding of the format
[3–4]
The principal elements of the B/S are constructed, but may not be entirely
accurate. The calculations under each heading/component/part are largely
correct.
Allow up to two mistakes in calculations and/or presentation for [3].
Allow for either one error in calculation or one error in presentation [4].
For an accurately constructed B/S with incorrect calculations, award up to a
maximum of [3].
Allow OFR.
For example, if one irrelevant figure that belongs to the P/L account is
added, obviously the rest will not match.
[5]
The B/S is accurately constructed in the expected IBO format. All the
relevant headings of each component/ parts are used and correctly
classified. Do not penalise for internal order of classification. All and only
the relevant figures are presented. No extra irrelevant figures that belong to
the P/L are included. The calculations under each part/ component of the
B/S are correct and well presented [5].
Deduct [1] for one omission including the overall heading provided the B/S
is accurately balanced.
N.B.: If the candidate did not follow the IBO format award up to [2] marks
(ii) calculate the current ratio for Papel for the end of October 2018. [1]
current assets 20
Current ratio = =1
current liabilities 20
Award [1] for the correct answer. Award no marks merely for writing the
formulae. Award [1] mark with OFR but working must be shown
– 11 – N18/3/BUSMT/HP2/ENG/TZ0/XX/M
(c) Explain one possible strategy, other than elimination of credit sales, for Papel to
improve its liquidity position. [2]
Liquidity is the ability to pay short-term debts. Papel’s liquidity position is delicate.
Working capital is zero and Papel´s acid test is 0.75, which means that Papel has
less than $1 of liquid assets with which to repay every $1 of its short-term debts.
Papel could improve its liquidity position by keeping a tight credit control with
debtors. Many are not paying on time, which means that Papel does not keep a
check of customers’ accounts.
Papel could use a debt factoring service to recoup some of the debt as a way to
boost its liquidity.
Papel should monitor debtors and chase them to pay on time and to respect the
credit periods established and agreed.
Reward candidates who highlight ‘surplus’ or ‘unused’ assets to sell but not a
generic response of ‘sell assets’. Award maximum [1] as no application is
possible.
Award [1] for a relevant generic strategy identified or described and [1] for any
additional explanation in context to DD.
[2] cannot be awarded for the strategy if the response lacks either explanation
and/or application.
For example: For an identification or a description of the strategy either debtors
or creditors with or without application [1].
Section B
Candidates are not expected to word their definition exactly as above. Eg may
omit mention of Stock Exchange if another feature of incorporation is present.
Award [1] for a basic definition that conveys partial knowledge and
understanding.
Award [2] for a full, clear definition that conveys knowledge and understanding
similar to the answer above.
(b) With reference to QS, explain two features of cradle to cradle manufacturing. [4]
As its name suggests, QS will design and produce its air conditioners in such a
way that most, if not all, of the materials used are recyclable. These materials
(like glass, metal, plastic) that form parts of the air conditioners will be recyclable
and used again for the production of future models. This will minimise waste.
Cradle to cradle manufacturing with also allow QS to reuse some of the ready
components of the old air conditions in the new models instead of disposing of
those parts. QS might have to offer some financial incentives for the customers to
return their old/outdated air conditioners.
The air conditioners will also be built with biodegradable materials if QS cannot
recycle the materials: for example, the carton for packaging of the air
conditioners. This aspect will allow QS to reduce the environmental impact of its
air conditioners.
Application here is very difficult – all of the stimulus info is about KA and gives no
real links to QS – hence I believe to avoid generic responses, candidates should
at least make reference to ‘air-conditioners” ie if responses just refer to QS and
this could be replaced with any other company – then this is generic and only [1].
Mark as 2 + 2.
Award [1] for each relevant feature explained and [1] for appropriate application
to the organization/type of products to a maximum of [2].
[2] cannot be awarded for the difference if the response lacks either explanation
and / or application.
For example:
For an identification or a description of a feature with or without
application [1].
For explanation of a feature with no application [1].
For explanation of a feature and application [2].
– 13 – N18/3/BUSMT/HP2/ENG/TZ0/XX/M
(c) Explain two possible human resource strategies that KA management could use
to reduce employees’ resistance to change. [4]
The employees are currently not involved in any decision making, so it can be
assumed that there is not much communication between employees and
management; as such, open and clear communication with the employees can
be seen as one possible change strategy. The management should be honest
and fully explain the reasons for the change. The management should
emphasize the positive outcome of outsourcing as a way to overcome some of
the weaknesses of KA, like an opportunity to improve customers’ perceptions.
The possibility of new opportunities for employees in the marketing department
should be emphasized as a new and motivating challenge. The management
should not lie about some of the negative outcomes, like job losses of those who
are not going to be employed in the marketing department.
Management should acknowledge the fear of the unknown and the possibility of
resistance to change due to fear of inability to cope with new challenges. A
promise of training should be provided for those who are going to be employed in
the marketing department if option 2 is chosen or for all employees if option 1 is
chosen.
[2] cannot be awarded for the chosen (change management) HR strategy if the
response lacks either explanation and / or application.
For example:
For an identification or a description of an HR strategy with or without
application [1].
For explanation of an HR strategy with no application [1].
For explanation of an HR strategy and application [2].
Given the fact that KA redesigned their product, both options will have the same
starting point of being more energy efficient.
For one relevant issue that is one-sided, award up to [3]. For more than one
relevant issue that is one-sided, award up to a maximum of [4].
A balanced response is one that provides at least one argument for and one
argument against each option.
Candidates may contrast one option with another for a balance as long as at
least two arguments are given for each option.
Award [1] for a basic definition that conveys partial knowledge and
understanding.
Award [2] for a full definition that conveys knowledge and understanding similar
to the answer above.
(b) Explain two advantages for LB of using on the job training. [4]
On the job training is cheaper than sending recruits on external training. This
is particularly advantageous for LB, as there are no hotel training schools
nearby. External training will mean travelling and hosting costs that LB is
unlikely to face due to cash-flow problems. Adding on external training costs
could worsen LB’s cash-flow postilion.
On the job training will enable new recruits to familiarize themselves with the
hotel’s culture and Felix´s way of doing things. A recent survey has revealed
that guests are pleased with LB due to employees’ polite and helpful attitude,
which means that Felix’s on the job training has been effective. It is unlikely
that new recruits will acquire this specific know-how with external training.
With on the job training, trainees will actually serve guests while they receive
training. This could help LB with its cash-flow problems, as labour costs could
be saved.
Felix will be able to watch the new recruits closely to follow their training. He
will be able to screen closely their potentialities and weaknesses and transmit
the hotel’s culture to them.
Award [1] for each correct advantage identified or described and [1] for a
relevant explanation with application to LB. Award up to a maximum of [2].
[2] cannot be awarded per advantage if the response lacks either explanation
and/or application.
(c) Explain the importance to LB of two elements of the extended marketing mix. [4]
People makes reference to the way employees relate to and communicate with
customers. This is another crucial element for a hotel. LB’s employees are polite
and helpful and particularly good with children. This has proved to be very
important for LB’s brand loyalty and customers’ perceptions of it, and also
provides a service that is perceived as very good value for money.
Mark as 2 + 2.
Award [1] for each correct element of the extended marketing mix identified and
described and [1] for a relevant explanation of the importance with application to
LB. Award up to a maximum of [2].
[2] cannot be awarded per element of the extended marketing mix that has been
identified if the response lacks either explanation and/or application.
Proposal 1
LB could follow Felix’s proposal to solve its cash-flow problems by reducing
cash outflows and raising additional finance. It is probably a lower-risk
strategy than Rose’s.
Negative cash outflows could be reduced by delaying payment to suppliers in
winter, instead of paying cash. However, LB could lose the generous
discounts they get, which in turn could lead to increasing direct costs.
Eventually, some suppliers may not accept delayed payments and may
demand cash on delivery.
LB could also delay hotel maintenance and refurbishments. However, LB
already needs some upgrades. Deteriorated facilities could t negatively affect
customer perception and brand loyalty. Sales may eventually fall.
LB can cut other overhead spending such as advertising or promotion costs.
These costs will reduce payments without affecting the quality of the service
provided. However, future demand may fall if LB is not promoted effectively.
Felix could lay-off some hotel staff or ask them to switch to part-time working.
He may even close the hotel completely for the winter season. However this
risks losing the services and know-how of key staff, who may not return in the
high-season.
Felix has also proposed to raise additional finance. LB could ask for a short-
term loan or look for a new business partner. Probably, interest rates will be
lower than overdraft rates and LB could save on some costs by substituting
the overdraft for a less expensive source of finance. A new business partner
will probably require some form of managerial control but fresh/innovative
thinking can be introduced into LB.
Alternative short-term sources of finance, such as the sale of assets and
debts factoring, seem unlikely to work for LB. It seems that LB does not have
assets to sell and there is no evidence that LB has many debtors.
Proposal 2
On the other hand, Rose believes that LB’s cash flow problems are due to
low capacity utilization in winter. She has proposed to attract a new segment
of customers.
If new business customers come in winter, cash inflows will increase.
However, to attract these customers, LB will need to build new facilities, such
as a convention centre or a gymnasium, to cater for the needs of this
particular market segment. This would involve a significant amount of finance
that LB does not have.
LB could try to find external finance, such as a long-term loan, equity finance
or a venture capitalist. However, these alternatives seem unlikely for LB in the
short term. All of them take time to be found. Bank loans are expensive and
LB may not have enough assets to present as collateral. Floating the
company could be quite expensive for a family-owned business.
Venture capitalists are not easy to find, particularly if the business is not a
promise of extraordinary profits.
LB will need to conduct extensive market research around the new market
segment and currently this will increase outflows at a time when monthly cash
flows are negative.
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A balanced response is one that covers at least one argument for and one
against each proposal.
For one relevant argument that is one-sided, award up to [3]. For more than one
relevant argument that is one-sided, award up to a maximum of [4].
Award [1] for a basic definition that conveys partial knowledge and
understanding.
N.B.: for full marks roles should be linked to some mention of stakeholders
For Benno, the mission statement has provided a way for the business to
differentiate itself from its competitors, especially at a time when competition in
the healthy soft drinks market is intense.
The mission statement is also a way to attract new investors who may have
empathy with the direction of Benno. This is an important role given the need for
Benno to be committed to innovation and CSR.
Award [1] for a basic answer that identifies a role of a mission statement.
Award [1] for a basic answer that identifies/explains a role of a mission statement
Award [2] for an answer that identifies/explains the roles of a mission statement
with application.
Mark as 2 + 2
– 21 – N18/3/BUSMT/HP2/ENG/TZ0/XX/M
(c) Explain one advantage and one disadvantage for Benno of using a focus group
of loyal customers. [4]
Possible application:
For Benno, an advantage of using a regular focus group is that they will be aware
of the company’s products and mission. This will reduce the amount of statistical
noise and save time in the discussions when looking at new product ideas, such
as biodegradable rings. Can help to support or otherwise, secondary research
regarding the importance of ‘green’ credentials and of price in the soft drinks
market.
However, having a regular group for Benno increases bias and reduces
objectivity of the data researched. It might be a useful exercise for Benno to ask
customers who are not overly familiar with their products to achieve a more
balanced qualitative view. Difficult to organize particularly in the target group of
12-18 year olds since they are minors and need consent to participate.
Mark as 2 + 2.
Mark as 2 + 2.
– 22 – N18/3/BUSMT/HP2/ENG/TZ0/XX/M
(d) Recommend whether Benno should replace its plastic drink rings with the new
biodegradable drink rings. [10]
For:
It fits in well with its mission statement “to produce healthy drinks without
damaging the environment” and this may be important in maintaining
customer loyalty.
It fits into its belief in corporate social responsibility, as the current drink rings
damage the environment and harm creatures in the seas, such fish.
Competition in this drinks market is very intense – this could act as a
strengthening of its USP for Benno and retain loyal customers and attract
customers from rivals. It will strengthen its image as a business that has
“green” credentials.
Sales of Benno’s drinks have fallen significantly over the last five years– so it
is important that Benno does something to stem this tide.
Accept any other reasoned arguments.
Against:
It will cost $5m to buy the machinery to produce the new rings and the
business has no accumulated retained profits – therefore the funds will need
to be raised, probably externally via a bank loan, which will lead to interest
charges and an increase in operating costs. It may take time to find a suitable
angel investor to help finance this project. Will the angel investor wish to exert
some control over Benno’s operations?
The unit cost increase is 50 %, a rise from 10 cents to 15 cents per ring, and
the business only has a net profit margin of 10 %. As the market is
competitive and reports suggest that consumers are price sensitive, a price
rise – passing on the cost of the new rings – is probably not going to be
possible. The result is that Benno’s net profit margin will fall.
Sales are falling, particularly to the 12–18 age group – are they going to be
energized into buying a product that is more environmentally friendly,
particularly when reports suggest purchases of green products are not
increasing?
In terms of a new way forward for Benno, the introduction of the new rings
has a great deal of merit. There are a large number of marketing
opportunities available in a competitive market and this idea will strengthen
Benno’s brand. However, the forecasted financial implications of this idea are
not ideal and if sales volumes do not increase significantly then Benno may
find itself financially worse off if profits do not increase. One solution may be
to wait until some more objective market research via a new untested focus
group have given their thoughts on the new ring.
Accept any other reasoned arguments.
Marks should be allocated according to the mark bands on page 3 with further
guidance below.
A balanced response is one that provides at least two arguments for and two
arguments against the option.
For one relevant issue that is one-sided, award up to [3]. For more than one
relevant issue that is one-sided, award up to a maximum of [4].
– 23 – N18/3/BUSMT/HP2/ENG/TZ0/XX/M
Section C
Marks should be allocated using the assessment criteria on pages 4 to 5 with further
guidance below.
N.B.: examiners should include a breakdown of each mark awarded per criterion and a
brief note explaining the mark awarded at the end of each candidate’s response.
The main aim of paper 2 (SL or HL) section C is to assess candidates’ understanding of the
six major concepts (change, culture, ethics, globalization, innovation, strategy) within a
business context. Candidates are to demonstrate their understanding through an
organization of their choice. The expectation of the use of an organization is to allow
assessment of the depth of candidates’ understanding through their ability to apply the
concepts and their knowledge.
8. With reference to an organization of your choice, examine the impact of ethics and
culture on human resource management. [20]
It is expected that the candidate explains the chosen theoretical direction / content of their
response.
Where the question asks for impacts of two concepts on content, examiners must allow for
unbalanced treatment of the two concepts throughout a candidate’s response. One concept
may be more significant than the other.
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In section C, the question rubric explicitly states that “organizations featured in sections A
and B and in the paper 1 case study may not be used as a basis” to candidate’s answers to
questions 6, 7 and 8. When this happens please award marks as follows:
Criterion A
Award a maximum of [1]. The business management content cannot be relevant if the
organization is fictitious.
Criterion B
0 marks – there is no connection to a real-world organization.
Criterion C
Award a maximum of [1]. The arguments cannot be relevant if the organization is fictitious.
Criterion D
Mark as normal.
Criterion E
Award up to a maximum of [1]. The individual and/or group perspective(s) cannot be relevant
if the organization is fictitious.
Criterion B
For [2]: “…connection is not developed” should be treated the same as superficial.
Criterion C
Questions 6 to 8 require consideration of the impact of one concept on a second concept
– therefore accept 2 + 2 arguments for a balanced response.
Justification is through logic or data.
For [2] there is no balance as there are no counter arguments at all, or the arguments are
all one-sided then this would be unjustified.
For [3] there is some balanced arguments – some of which are justified.
Criterion D
Introductions need to be concise and related to the question.
The candidate’s response does not to have explicit headings for each structural element.
A body is the area in which the substance of arguments occur. It is usually located
between the introduction and the conclusion.
Fit-for-purpose paragraph means that ideas are presented in a clear academic way. For
example, one idea per paragraph.
Criterion E
One example of an “individual” could be an individual consumer or an individual
manager. However this could not be considered with a “group” of consumers or a
management team.
For [4], a balanced response: need to look at the perspectives of both individual and
group(s). The chosen individual, group needs to be applicable and relevant to the
question with specific explanation.
Candidates need to go beyond stating the stakeholder.
Candidates need not explicitly say “stakeholders”.