A Level Business: The nature of operations (Cambridge 9609) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

This set covers section 4.1, The nature of operations, from the Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028 (AS Level topic 4). Every business below is invented. Read the study guide first, or use the revision notes. Section 4.2 has its own operations practice questions. Course links: Cambridge A Level Business hub, the printable checklist and the free diagnostics.

Questions

1. Hexdale Candles makes scented candles. State which factor of production each item below is: (i) a wax-melting machine, (ii) the founder, who risked her own savings to start the firm, (iii) the plot of land the workshop stands on, (iv) a packing assistant. [4]

2. Define added value. A sofa sells for £480. Bought-in fabric costs £190 and bought-in frames and fittings cost £90. Calculate the added value per sofa. [3]

3. Hexdale Candles made 9,600 candles in March with 16 employees and 10,350 candles in April with 15 employees. Calculate labour productivity for each month and the percentage change. [4]

4. Explain the difference between efficiency and effectiveness, using an example. [3]

5. A restaurant plans to reduce its food waste and fit low-energy kitchen equipment. Explain two impacts of these measures on the restaurant. [4]

6. Wharfdale Bottlers can fill bottles on a capital intensive line (fixed costs £90,000 a year, variable cost £0.50 a bottle) or with a labour intensive set-up (fixed costs £24,000, variable cost £1.30 a bottle).

(a) Calculate the annual output at which total costs are the same. [3] (b) Calculate the total cost of each set-up at 100,000 bottles. [2] (c) Recommend which set-up Wharfdale should use if it expects 100,000 bottles a year, and state one other factor it should consider. [2]

7. Identify the operations method (job, batch, flow or mass customisation) in each case: (i) a custom-built racing yacht, (ii) a continuous line filling identical drink cans, (iii) a bakery making 500 rolls, then 300 cakes, on the same ovens, (iv) a website where customers choose the colours and engraving on a pen assembled from standard parts. [4]

8. A small workshop restores antique chairs by hand. Analyse one benefit and one limitation of its labour intensive operation. [4]

9. Define mass customisation. Explain one benefit and one limitation of this method for a business. [5]

10. Dentonby Pottery has 12 craft potters. Each piece is made to order. Commissions bring 45% of sales revenue. The owner plans to move to batches of 200 identical items for retailers. This needs a £45,000 machine and three weeks of retraining. Analyse two problems the pottery may face in changing its operations method. [6]

11. Cragfield Cycles builds bicycles in batches. It makes 400 a month with 30 employees. It is considering a £180,000 flexible assembly line. The line would let customers choose frame size and colour online, and would reduce wasted material. Output is forecast at 520 a month with 22 employees. For two months while the line is installed, output would fall to 280 a month. Eight employees would move to roles in the sales team or leave.

(a) Calculate labour productivity before and after the change and the percentage change. [3] (b) Evaluate whether Cragfield Cycles should adopt the new line. [7]

Answers

1. (i) Capital [1]. (ii) Enterprise [1]. (iii) Land [1]. (iv) Labour [1]. [4] Examiner insight: each part needs the factor named, not a description. Learn the four terms exactly as the syllabus lists them.

2. Added value is the selling price minus the cost of bought-in materials and components [1]. Added value = 480 - 190 - 90 [1] = £200 per sofa [1]. [3] Examiner insight: a definition that says “profit” or “revenue minus all costs” describes something different. Mention bought-in inputs.

3. March: 9,600 / 16 = 600 candles per employee [1]. April: 10,350 / 15 = 690 per employee [1]. Change = (690 - 600) / 600 [1] = +15% [1]. [4] Examiner insight: show the division for each month and use the old figure as the base for percentage change. Include units such as candles per employee.

4. Efficiency means producing output with little waste of resources such as time, materials or energy [1]. Effectiveness means achieving what the business set out to do, such as meeting customer needs [1]. For example, a factory can use materials efficiently but be ineffective if it makes goods customers do not want [1]. [3] Examiner insight: answers that treat the two words as synonyms earn little. The example is what shows you can tell them apart.

5. Impact 1: less food waste lowers the cost of ingredients bought, so running costs fall and profit margins can improve [2]. Impact 2: low-energy equipment costs money to buy, so there is an outlay at first, but energy bills fall later, so the restaurant needs to weigh the savings against the cost [2]. (Other valid impacts include an improved image with customers who value sustainability.) [4] Examiner insight: name the measure’s effect on the business (costs, image, cash), not just what the measure is. Each impact needs a reason.

6. (a) Difference in fixed costs = 90,000 - 24,000 = 66,000 [1]. Difference in variable cost = 1.30 - 0.50 = 0.80 per bottle [1]. Output = 66,000 / 0.80 = 82,500 bottles [1]. (b) Capital intensive: 90,000 + 0.50 x 100,000 = £140,000 [1]. Labour intensive: 24,000 + 1.30 x 100,000 = £154,000 [1]. (c) Recommend the capital intensive line, because 100,000 is above 82,500 and it is £14,000 cheaper [1]. Another factor: demand may be uncertain, and the line has high fixed costs and less flexibility (or the firm may not have the cash for the outlay) [1]. [7] Examiner insight: show the equation or the subtraction so the method is visible. For part (c), a recommendation tied to the figures is stronger than a general statement.

7. (i) Job [1]. (ii) Flow [1]. (iii) Batch [1]. (iv) Mass customisation [1]. [4] Examiner insight: look for clues in the stem: one-off, continuous, switching between products, and customer choice from standard parts.

8. Benefit: the workshop can treat each chair differently, so it offers a personal service and can charge a higher price [1]. Developed: customers with valuable antiques pay for care and skill that machines would not give, which supports revenue [1]. Limitation: output is limited by the number of skilled restorers and the work is slow [1]. Developed: cost per chair is high, and the workshop cannot easily grow without hiring and training more staff [1]. [4] Examiner insight: “analyse” asks for a benefit or limitation developed with its consequence for this workshop. A list of one-word labels would not show that development.

9. Mass customisation is producing in volume from standard parts or processes while letting each customer choose a personalised product [1]. Benefit: customers get personal choice, so the firm can charge a higher price than for a standard product [1], while still gaining some of the cost savings of volume production [1]. Limitation: it needs flexible systems and technology, which are costly to install [1], and managing many combinations is complex, so customers may wait longer than for a stocked item [1]. [5] Examiner insight: a definition that only says “customised” misses the mass-production element. Write both parts.

10. Problem 1, cost: the £45,000 machine and three weeks of retraining are an outlay and lost working time [1]. Twelve potters will not be producing for three weeks, so output and revenue fall in the short term, which strains cash [1], and the cost may take time to recover if retail prices per item are low [1]. Problem 2, customers and staff: commissions are 45% of revenue, so moving to batches may lose customers who value unique pieces [1]. Craft potters may dislike repetitive batch work and resist or leave, which hurts morale and skill [1], reducing the firm’s brand as a maker of individual pieces [1]. [6] Examiner insight: use the figures in the stem (45%, £45,000, three weeks, 12 potters). Problems about the method change in general, not about this pottery, are weaker.

11. (a) Before: 400 / 30 = 13.3 bicycles per employee [1]. After: 520 / 22 = 23.6 bicycles per employee [1]. Change = (23.6 - 13.3) / 13.3 = +77% (rounded) [1]. (b) For: productivity rises about 77%, so labour cost per bicycle should fall [1], and output rises 30% from 400 to 520 (520 / 400 = 1.3) [1]. Customer choice of size and colour can raise the price Cragfield can charge, and less wasted material supports sustainability and lower costs [1]. Against: £180,000 outlay is large and may strain cash [1]; output falls by 120 a month for two months, a loss of 240 bicycles in total [1]; eight employees move or leave, which may hurt morale and require redundancy or retraining costs [1]. Judgement: the new line is likely to be worthwhile if demand for personalised bicycles is strong enough to sell 520 a month, as the gain in productivity is large and the disruption lasts only two months. Cragfield should first check demand and its ability to fund the outlay, or phase the change [1]. [10] Examiner insight: for “evaluate”, reasons on both sides are not enough on their own. A final judgement that depends on a condition (demand, cash, timing) and uses the case data tends to carry the most credit.

Where marks are usually lost

• Defining added value as profit or as all revenue.
• Naming a factor of production with no link to the business.
• Using the new figure as the base in a percentage change.
• Treating efficiency and effectiveness as the same idea.
• Giving the benefit of a method with no explanation of what it does to cost, quality or price.
• Saying capital intensive is always cheaper without checking the output level.
• Describing the problems of changing method without using the numbers in the case.
• Stopping an evaluation at a list of pros and cons with no judgement.

Next steps

• Review the revision notes and the study guide.
• Try the inventory and capacity questions.
• Use the Cambridge A Level Business hub and the printable checklist.
• Take one of the free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

Which section of Cambridge AS and A Level Business 9609 do these questions cover? Section 4.1 The nature of operations, including the factors of production, added value, productivity, operations methods and sustainability.

Which figure is the base in a percentage change? The old, or original, figure. Using the new figure as the base is a common error in productivity questions.

Is capital intensive production always cheaper? No. Check the expected output level against the output at which total costs are equal before recommending a set-up, and show the method in your working.

What does an evaluate question on changing operations method need? Use the figures in the stem, such as costs, retraining time and productivity, on both sides, then reach a clear judgement. A list of pros and cons with no judgement limits the marks.

Official syllabus

Cambridge International AS & A Level Business 9609 syllabus, for examination in 2026, 2027 and 2028, published by Cambridge University Press & Assessment (Cambridge International). Section 4.1, The nature of operations.