O Level Business: Production of goods and services (Cambridge 7115) – 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.

These questions follow section 4.1, Production of goods and services, of the Cambridge O Level Business Studies 7115 syllabus for examination in 2026. Every business and figure is invented. Read the study guide first, or use the revision notes. An earlier set on location and break-even is on the operations management practice page. See also the hub and checklist.

Questions

1. Distinguish between production and productivity. [4]

2. Cranmoor Printing made 14,400 leaflets in a week with 18 workers. After it bought a faster press it made 16,800 leaflets in a week with 16 workers.

(a) Calculate labour productivity before the new press. [2] (b) Calculate labour productivity after the new press. [2] (c) Calculate the percentage change in labour productivity, to one decimal place. [2]

3. Starlingdale Tyres makes car tyres and keeps a large store of finished tyres.

(a) State two reasons why a business holds inventories. [2] (b) Explain one cost to Starlingdale Tyres of holding too many inventories. [3]

4. Greystoke Fabrics wants to raise efficiency. Explain one way that improving the skills of its weaving staff could increase efficiency, and one benefit to the business of becoming more efficient. [4]

5. Bramblewick Bakery plans to use just-in-time (JIT) inventory control for flour and butter.

Analyse one benefit and one risk to Bramblewick Bakery of using JIT. [6]

6. Lanternfield Lighting assembles table lamps in teams of eight.

(a) State what is meant by Kaizen. [2] (b) Explain one benefit to Lanternfield Lighting of using Kaizen. [3]

7. Ivywood Furniture makes wardrobes to fit the odd-shaped bedrooms of individual customers.

(a) State two features of job production. [2] (b) Explain one limitation of job production for Ivywood Furniture. [3]

8. Pebblebrook Dairy fills yoghurt pots on a flow production line. The line runs for 24 hours a day and fills 1,500 pots every hour. Total costs of running the line are 5,040 dollars a day.

(a) Calculate the daily output of the line. [2] (b) Calculate the average cost per pot, in dollars. [2] (c) Explain one limitation of flow production for Pebblebrook Dairy. [3]

9. Quarryhill Stoneworks makes concrete paving slabs in three designs. Each week customers order about 200 to 300 slabs of each design. Changing a mould between designs takes one hour. The owners want to keep prices low but cannot afford a fully automated line.

Recommend and justify the most suitable method of production for Quarryhill Stoneworks. [8]

10. Beaconsfield Pens is a small business that designs and makes fountain pens. It is considering using computers in design and manufacturing.

Explain two ways that this technology could change how Beaconsfield Pens produces its pens. [6]

11. Redwater Bikes has 40 workers who make 2,000 bicycles a month. It is considering two changes.

• Robot welders would raise output to 2,300 bicycles a month with 38 workers.
• Just-in-time (JIT) delivery of components would cut the value of components held in stock from 60,000 dollars to 15,000 dollars. The firm estimates that holding stock costs 2% of its value each month. One delivery in ten from its main supplier is currently late.

(a) Calculate the labour productivity before and after the robot welders, and the percentage change, to one decimal place. [3] (b) Calculate the monthly saving in holding costs if the firm adopts JIT. [2] (c) Evaluate whether Redwater Bikes should adopt JIT. [5]

Answers

1. Production is the total output of goods or services that a business makes in a period, by managing its resources [1]. Productivity measures output in relation to the resources used, for example output per worker [1]. For example, a factory that makes 500 units with 10 workers has production of 500 units and productivity of 50 units per worker [1]. The two can move differently: production can rise because more workers were hired while productivity stays the same [1]. [4] Examiner insight: Two separate definitions often earn less than answers that also contrast the terms, so add a short example.

2. (a) Labour productivity = output / workers = 14,400 / 18 [1] = 800 leaflets per worker per week [1]. (b) 16,800 / 16 [1] = 1,050 leaflets per worker per week [1]. (c) Change = (1,050 - 800) / 800 x 100 [1] = 31.3% increase [1]. [6] Examiner insight: Show the division and give units. Use the old figure as the base for the percentage.

3. (a) Any two reasons, one mark each, such as: to keep production going if a supplier is late; to meet a sudden rise in demand; to supply customers straight away; to buy in bulk at a lower price; to prepare for seasonal demand [1][1]. [2] (b) Costs include storage space and insurance [1]. Tyres are bulky, so a large store needs a big warehouse, which raises rent and heating bills [1]. Money spent on tyres that are not yet sold is tied up and cannot be used elsewhere, which can strain cash flow [1]. [3] Examiner insight: A cost named without development, such as “it costs money”, tends to gain little. Link it to the product, here bulky tyres.

4. Trained weavers can run the looms faster and make fewer mistakes [1], so output per worker rises and less cloth is wasted [1]. A benefit of greater efficiency is a lower average cost per metre of fabric [1], which lets Greystoke cut its price to win customers or keep a higher profit margin [1]. [4] Examiner insight: Connect the way to the benefit with words such as “so” or “which means” to show the chain.

5. Benefit: with JIT, flour and butter arrive just as they are needed, so little needs storing [1]. This lowers holding costs and means fewer ingredients go stale and are thrown away [1]. Lower waste and costs raise profit, or allow lower prices [1]. Risk: Bramblewick relies completely on its suppliers [1]. If a delivery of flour is late, the ovens cannot run and bread cannot be baked [1], so sales are lost and customers may go elsewhere [1]. [6] Examiner insight: Analyse means break a point into cause and effect. A list such as “less waste, lower cost” without saying why JIT leads to it usually stays at description.

6. (a) Kaizen is continuous improvement [1] made up of many small changes, usually suggested by the workers themselves [1]. [2] (b) The assembly teams can suggest small changes, such as moving tools closer to the bench [1]. This reduces wasted movement and time, so each lamp is assembled faster [1]. Faster assembly lowers cost per lamp, and workers who help shape the process may feel more involved and motivated [1]. [3] Examiner insight: Applying the idea to the lamps or the teams shows application. A generic claim that Kaizen “improves quality” could fit any firm.

7. (a) Any two features, one mark each, such as: each item is made individually; made to a customer’s order; skilled workers are used; each product is different; the price is usually high [1][1]. [2] (b) Job production is slow and labour intensive [1]. Each wardrobe has to be measured, cut and fitted separately, so skilled workers spend a long time on one item [1]. This raises the cost per wardrobe, so Ivywood must charge a high price, which may limit the number of customers it can attract [1]. [3] Examiner insight: Choose a limitation that fits the business, and still say why it arises.

8. (a) Daily output = 1,500 x 24 [1] = 36,000 pots [1]. (b) Average cost = total cost / output = 5,040 / 36,000 [1] = 0.14 dollars per pot [1]. (c) Flow production is inflexible [1]. The line is built for one standard pot, so changing size or recipe means stopping and altering the machinery [1]. If one machine breaks down the whole line stops, so output of all 1,500 pots an hour is lost until it is fixed [1]. [7] Examiner insight: Write the formula before substituting. In (c), say what happens at Pebblebrook because of the limitation.

9. Recommendation: batch production [1].

Justification: orders are for lots of 200 to 300 identical slabs of each of three designs [1], which suits making one design as a batch and then switching moulds [1].

Job production would make each slab separately, which is too slow and gives a high cost per slab [1], and that conflicts with the aim of low prices [1].

Flow production gives the lowest unit cost, but it needs a large, automated line that the owners cannot afford [1]. Demand of a few hundred slabs per design is also modest, so such a line would be idle much of the time [1].

The drawback of batch is the hour lost at each mould change, but with three designs this is a small share of the working week, and I judge the cost of lost time less than the cost of the alternatives [1]. [8] Examiner insight: A strong recommendation uses figures from the case and compares with at least one alternative.

10. First way: computer-aided design (CAD) lets designers draw and test new pens on screen [1]. Changes can be made quickly without making a physical model each time, so development takes less time [1] and costs less, which helps a small business launch new designs [1]. Second way: computer-aided manufacturing (CAM) means computers control the machines that shape the pens [1]. Each pen is made to the same accurate size, so there are fewer defects [1], and the machines can run overnight, so output rises and unit cost falls [1]. [6] Examiner insight: “Two ways” means two separate points, each developed.

11. (a) Before: 2,000 / 40 = 50 bicycles per worker [1]. After: 2,300 / 38 = 60.5 bicycles per worker [1]. Change = (60.5 - 50) / 50 x 100 = 21.0% increase [1]. [3] (b) Current cost = 2% of 60,000 = 1,200 dollars per month; JIT cost = 2% of 15,000 = 300 dollars per month [1]. Saving = 900 dollars per month [1]. [2] (c) In favour: JIT saves 900 dollars a month in holding costs and frees up cash that was tied up in components [1]. It also reduces the storage space needed [1]. Against: one delivery in ten is already late, and with little stock a late delivery would stop the assembly line [1]. The loss of output from a stopped line, with 2,000 bicycles a month at stake, could be far larger than the 900-dollar saving [1]. Judgement: Redwater should not adopt JIT yet, or should do so only after it has a more reliable supplier or agrees a small safety stock, because the saving is small compared with the risk [1]. [5] Examiner insight: An evaluation needs a decision and a reason that weighs both sides, using the figures given.

Where marks are usually lost

• Giving productivity as a total instead of per worker.
• Dividing a percentage change by the later figure instead of the starting one.
• Describing JIT as “no stock at all” and ignoring the dependence on suppliers.
• Writing “Kaizen improves quality” with no mention of small, continuous changes.
• Recommending a method of production without comparing it with an alternative.
• Writing one-sided evaluations with no final judgement.
• Giving a single developed point when two ways or two reasons are requested.

Frequently asked questions

Are these Cambridge O Level Business Studies 7115 past paper questions? No. They are original short-answer, calculation and case-study questions written for Marlbridge on section 4.1, Production of goods and services. Use them alongside the official past papers.

How do you show a productivity calculation clearly? Write the formula before substituting, show the division and give the units, such as leaflets per worker per week. Use the old figure as the base when calculating a percentage change.

How do you score application marks on Kaizen or JIT questions? Apply the idea to the named business, such as its products, teams or suppliers. A generic claim that could fit any firm, such as “Kaizen improves quality”, gains little.

What does an “analyse” answer on lean production need? Break the point into cause and effect, linking with words such as “so” or “which means”. A list such as “less waste, lower cost” without saying why the method leads to it is not analysis.

How do you answer a “two ways” question? Give two separate points and develop each one. A single developed point when two are requested limits the marks available.

Next steps

• Review the revision notes and the study guide.
• Open the course hub and the printable checklist.
• Take the free 10-minute diagnostics to find weak topics.
• Try the earlier operations management questions on location and break-even.
• Book a free trial class at /trial/.

Official syllabus

Cambridge O Level Business Studies 7115, syllabus for examination in 2026, published by Cambridge International. Section 4.1: Production of goods and services.