IB DP Business Management: R&D (HL only) and Management information systems (HL only) – 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 – the IB holds copyright in its own papers. Use these alongside the official past papers available through your school or the IB store.

These questions cover sections 5.8 (Research and development) and 5.9 (Management information systems) of the IB Business management guide, first assessment 2024. Both sections are HL only.

Read the study guide or the revision notes. The hub is IB DP Business Management and the list is the syllabus checklist.

Questions

1. Tarnbright Tools makes hand tools. In year 1 its sales revenue was 52.0 million dollars and its R&D spending was 3.64 million. In year 2 sales revenue was 60.0 million and R&D spending was 3.9 million.

(a) Define research and development. [2] (b) Calculate R&D spending as a percentage of sales revenue in each year, and the percentage change in R&D spending between the years. [4]

2. Tarnbright has developed a new hinge mechanism, a logo for its premium range and a written instruction manual. State which form of intellectual property (copyright, patent or trademark) would normally protect each item. [3]

3. Explain one benefit and one limitation to Tarnbright of protecting its hinge mechanism with a patent. [4]

4. Nautilene Marine builds small boats. It is developing a quiet electric ferry for harbour towns, which operators have never asked for.

(a) Distinguish between incremental and disruptive innovation. [2] (b) Explain why the ferry may address an unmet need of which customers are not aware. [3]

5. Halmerick Garden Centres has a loyalty programme with 12,000 members. Each member spends an extra 9 dollars a month since joining, at a gross margin of 30%. Rewards cost 1.50 dollars per member a month, plus 8,000 dollars of fixed costs a month.

(a) Calculate the net monthly benefit of the programme. [4] (b) Suggest one reason why the figure in (a) may overstate the benefit. [2]

6. A supermarket examines 4,000 baskets. In 800 baskets there is barbecue charcoal; in 520 of these there are also sausages. Sausages appear in 1,000 baskets in total.

(a) Calculate the support for the pair (charcoal and sausages), and the confidence that a charcoal basket also contains sausages. [2] (b) Explain one way the supermarket might use data mining to inform a decision, and one limit of the result. [3] (c) Outline one difference between a database and big data. [2]

7. Cravenholt Media runs its own data centre at a yearly cost of 240,000 dollars. A cloud supplier would charge 6,500 dollars a month.

(a) Outline what is meant by cloud computing and by a data centre. [2] (b) Calculate the yearly saving from moving to the cloud, as a dollar amount and as a percentage of the current cost. [3]

8. Kindlewick Clinics suffered a cyber attack that exposed 18,000 patient records. Costs: 14 dollars per record to notify and support patients, 85,000 dollars for system recovery and 120,000 dollars in lost appointments.

(a) Calculate the total cost. [3] (b) Explain one cybersecurity measure Kindlewick could adopt. [2]

9. Outline the internet of things and virtual reality, giving one business use of each. [4]

10. Kindlewick Clinics plans to use artificial intelligence to rank patient appointment requests.

(a) Outline what an artificial neural network is. [2] (b) Explain one benefit and one ethical concern of the plan for patients. [4]

11. Thornfold Couriers equips each driver with a handheld device that records deliveries, location and time. The target is 90 parcels an hour. One driver delivered 612 parcels in 8 hours; 21 deliveries failed.

(a) Calculate the driver’s delivery rate per hour and the rate as a percentage of the target. [3] (b) Evaluate the use of data to manage and monitor Thornfold’s employees, including the idea of Digital Taylorism. [8]

12. Nautilene Marine has 12.0 million dollars in cash. It must choose between two projects.

Project A (disruptive design): cost 9.0 million, probability of success 0.4, total contribution 30.0 million over six years if successful, nothing if not.

Project B (incremental upgrade): cost 1.8 million, probability of success 0.8, total contribution 5.5 million if successful, nothing if not.

(a) Calculate the expected value of each project, allowing for its cost. [4] (b) Recommend which project Nautilene should choose. [6]

Answers

1. (a) R&D is work to discover new knowledge [1] and turn it into new or improved goods, services or processes [1]. [2] (b) Year 1: 3.64 ÷ 52.0 × 100 = 7.0% [1]. Year 2: 3.9 ÷ 60.0 × 100 = 6.5% [1]. Change in spending: (3.9 − 3.64) ÷ 3.64 × 100 [1] = 7.1% (to 1 d.p.) [1]. [4] Examiner insight: A calculate answer is easier to credit when the formula and substitution are visible. R&D as a share of sales revenue is a standard ratio, so say what you are measuring.

2. Hinge mechanism: patent [1]. Logo: trademark [1]. Instruction manual: copyright [1]. [3] Examiner insight: Each item needs its own match.

3. Benefit: it stops rivals copying the hinge without permission [1], so Tarnbright can recover its R&D costs through its own sales or by licensing the design for a fee [1]. Limitation: obtaining and enforcing a patent costs money and time [1], and enforcement may be hard in other countries, so rivals might still copy the hinge [1]. [4] Examiner insight: Explain answers usually need the point plus a consequence for the business. Saying a patent “protects the product” only describes.

4. (a) Incremental innovation improves an existing product or process in small steps [1]. Disruptive innovation creates a product or model that changes how the market works [1]. [2] (b) Operators have never asked for the ferry, so they may not realize their noise or fuel costs could fall [1]. A survey would not reveal it [1]. A prototype or trial could show the benefit and create demand [1]. [3] Examiner insight: For distinguish, write a clear difference. In (b), tie the answer to the harbour operators.

5. (a) Extra sales revenue = 12,000 × 9 = 108,000 dollars [1]. Extra gross profit = 108,000 × 30% = 32,400 [1]. Costs = 12,000 × 1.50 + 8,000 = 26,000 [1]. Net benefit = 32,400 − 26,000 = 6,400 dollars a month [1]. [4] (b) Members may already have been the best customers [1], so some of the extra spending would have happened anyway [1]. [2] Examiner insight: A suggest answer needs a reason that fits the data. A difference in spending is not proof of cause.

6. (a) Support = 520 ÷ 4,000 = 13% [1]. Confidence = 520 ÷ 800 = 65% [1]. [2] (b) Use: place sausages near the charcoal [1]; sausages are in 25% of all baskets, so 65% is stronger than chance [1]. Limit: the link does not prove a cause, so test the offer first [1]. [3] (c) A database is an organized, searchable collection of data, usually held for a business purpose [1]. Big data is data so large, fast or varied that ordinary tools struggle with it [1]. [2] Examiner insight: Support and confidence are standard data-mining measures, not guide content. Applying the result to a decision is where the AO3 credit lies.

7. (a) Cloud computing is storage and processing supplied over the internet, usually paid for by use [1]. A data centre is a facility holding the servers and storage that run IT systems [1]. [2] (b) Cloud cost = 6,500 × 12 = 78,000 [1]. Saving = 240,000 − 78,000 = 162,000 dollars [1]. Percentage = 162,000 ÷ 240,000 × 100 = 67.5% [1]. [3] Examiner insight: Convert monthly figures to years first.

8. (a) Notification and support = 18,000 × 14 = 252,000 [1]. Add recovery and lost appointments: 252,000 + 85,000 + 120,000 [1] = 457,000 dollars [1]. [3] (b) Measure: train staff to spot phishing, or encrypt patient records [1]. Explanation: many attacks rely on a person clicking a bad link, or encryption makes stolen files unreadable [1]. [2] Examiner insight: Name one measure and say how it works.

9. IoT: a network of physical objects with sensors that send and receive data [1]; use: machines report wear so maintenance can be planned [1]. VR: an immersive computer-generated environment [1]; use: training staff in a safe setting, or a virtual showroom [1]. [4] Examiner insight: An outline is a brief account, so a short accurate point and a use for each is enough.

10. (a) A computing system loosely modelled on the brain [1] that learns patterns from examples [1]. [2] (b) Benefit: requests can be ranked quickly [1], so urgent patients may be seen sooner [1]. Concern: if the training data reflects past bias, some groups may be ranked lower [1], and patients may not be able to see how the ranking was reached [1]. [4] Examiner insight: Ethical points are credited when linked to a stakeholder, here the patients.

11. (a) Rate = 612 ÷ 8 = 76.5 parcels an hour [1]. Percentage of target = 76.5 ÷ 90 × 100 [1] = 85.0% [1]. [3] (b) For: clear targets, and quick spotting of drivers who need help [1]; evidence for decisions about pay or training [1]; digital tools apply Taylor’s ideas of measurable tasks and standard times, which can raise output [1]. Against: constant monitoring can cause stress and reduce trust [1]; a rate of 85.0% does not show causes such as traffic, so it may be unfair [1]; a speed target may push drivers to rush, and 21 of 612 deliveries (3.4%) failed [1]; location tracking raises privacy concerns [1]. Judgement: Thornfold gains most if it uses the data for support, counts quality as well as speed and tells drivers what is recorded [1]. [8] Examiner insight: Evaluation answers tend to need both sides tied to the business, and a conclusion. Using the figures from (a) shows application.

12. (a) Project A: 0.4 × 30.0 = 12.0 [1]; 12.0 − 9.0 = 3.0 million [1]. Project B: 0.8 × 5.5 = 4.4 [1]; 4.4 − 1.8 = 2.6 million [1]. [4] (b) For A: higher expected value (3.0 against 2.6 million) [1]; it could open a new market and give lasting advantage [1]. Against A: it uses 75% of the 12.0 million cash [1], and failure would lose 9.0 million, with no income to recover it [1]. For B: lower risk, using 15% of cash, with an 80% chance of success [1]. Against B: a small gain that may not protect against a rival. Recommendation: choose B, or a staged version of A, because the expected value gap is only 0.4 million while A’s downside threatens the business, and the probabilities are only estimates [1]. [6] Examiner insight: Expected value does not decide the question alone. Better answers weigh it against risk and cash.

Where marks are usually lost

• Defining a technology without linking it to the business in the stem.
• Comparing monthly and yearly figures without converting.
• Treating a data-mining pattern, or a loyalty-programme gain, as proof of cause.
• Choosing the project with the highest expected value without weighing risk and cash.
• Giving a one-sided answer to “evaluate” or “recommend” with no conclusion.

Next steps

• Review the revision notes and the study guide.
• Return to the course hub and the syllabus checklist.
• Try all free 10-minute diagnostics at /diagnostics/.
• Book a free trial class at /trial/.

Frequently asked questions

Are R&D and management information systems HL only in IB Business Management? Yes. Section 5.8 (Research and development) and section 5.9 (Management information systems) are both HL only in Unit 5 of the IB Business management guide, first assessment 2024.

What are common mistakes on R&D and MIS practice questions? Students often define a technology without linking it to the business in the stem, compare monthly and yearly figures without converting, and treat a data-mining pattern or loyalty-programme gain as proof of cause. Choosing the project with the highest expected value without weighing risk and cash also loses marks.

Does a pattern found by data mining prove a cause? No. A link between two items in the data is not proof that one causes the other, so any action it suggests should be tested before the business relies on it.

How should you choose between a risky and a safe R&D project? Compare expected values, but also weigh the risk of failure, how much cash the business has, and its competitors and market. Give a conclusion that names what else you would want to know.

Official syllabus

IB Diploma Programme Business management guide, first assessment 2024, published by the International Baccalaureate Organization. Sections 5.8 and 5.9 (both HL only).