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IBDP Business Management HL Predicted Paper 3 sample

Questions

Question 1

Part 1
[2]

Describe the human need that ACC is addressing in peri-urban Country Z and explain how the AquaCart product directly meets that need. Refer to one concrete product/feature from Resource 2.

ACC must scale up for the GlobalAid order while continuing service to communities.

Part 2 (a)
[3]

Explain one marketing challenge ACC faces when serving both low-income households and institutional buyers (such as clinics, schools, NGOs), using evidence from the resources.

Part 2 (b)
[3]

Explain one finance/working-capital challenge that could arise from the stated payment terms and mobile-money settlement delays. Use details from the resources to support your answer.

You are ACC’s operations–finance analyst. Prepare a concise decision-making document advising how to fulfil GlobalAid’s 120-unit order (30 units per month over four months) while protecting ACC’s social mission and financial position.

Calculate for Year t (Resource 4):

Part 3 (a)
[4]

i. gross profit margin (GPM) and profit margin (PM);
ii. current ratio.

Show all workings and correct units.

(Use: GPM = gross profit ÷ revenue × 100; PM = net profit ÷ revenue × 100; current ratio = current assets ÷ current liabilities.)

Part 3 (b)
[2]

Determine whether ACC can meet GlobalAid’s first-month delivery (30 units) using current in-house capacity only, given Resource 5. Show workings. (State nominal versus typical output and reference any quality-related rework impact on throughput.)

Part 3 (c)
[7]

Prepare a make-or-buy analysis for fulfilling all 120 units over the four months under each option below. Construct a clear table and calculate the total relevant cost (£) for each option. State assumptions taken from Resources 2, 3 and 5; show workings.

Option 1 (In-house only, current set-up):
In-house unit build cost £3 800; add £50 meter casing. Expected steriliser rework rate 7% adds £120 per affected unit (Resource 5). Capacity: typical 24 units/month. Any shortfall beyond in-house capacity must be backlogged to subsequent months (no outsourcing).

Option 2 (In-house + outsource mix, no investment):
Produce in-house up to capacity (include rework as above); outsource the remainder at £4 250 per unit (meets QC) plus £50 casing; four-week lead time (assume this fits the monthly cadence).

Option 3 (Invest in jig/test bench now):
Upfront £260 000 (ignore tax; exclude any residual beyond the four-month horizon). Install time three weeks; from Month 2 in-house capacity becomes 40 units/month, and labour cost decreases by £200 per unit; steriliser defect rate reduces to about 3% (rework still £120 per affected unit). Use in-house first; outsource only if needed at the same rate as Option 2. Include the £50 casing on every unit.

Presentation guidance:
• Treat penalties as avoidable with proper QA (do not add penalty costs into the base case).
• Model rework as expected cost per unit = rework rate × £120.
• If in Option 1 the Month-1 output is below 30 units, show resulting backlogs month-by-month.

Part 3 (d)
[4]

Recommend the production plan you judge best for ACC (and which steriliser supplier, A or B), justifying your choice with reference to:

  • cost findings from part (c)

  • QC “zero-defect acceptance”

  • capacity/timing

  • payment terms and cash-flow risk

  • key stakeholder impacts (operators, communities, GlobalAid)

Question 2

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