OxfordAQA A-Level Business: Operational performance (9725) – 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 the OxfordAQA International AS and A-level Business (9725) specification, Version 1.1, for International AS exams from May/June 2027. They cover section 3.2.1 Operational performance (3.2.1.1 to 3.2.1.3), which is International AS content assessed in Unit 2. If you are finishing the older 9625 specification, use your own specification. All businesses are invented.

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Questions

1. State what is meant by “lead time” and “buffer stock”. [2]

2. Fixwell Phones repairs mobile phones and sells accessories online.

(a) In one week, 120 customers waited a total of 1,560 minutes for repairs. Calculate the average waiting time. [2] (b) It sold 640 accessories online and 48 were returned. Calculate the proportion of returned items. [2]

3. Ashgrove Ceramics makes mugs. Its monthly fixed costs are £9,800 and its variable cost is £1.80 per mug. Last month it made 7,000 mugs. Its maximum potential output is 8,000 mugs a month.

(a) Calculate the unit cost. [2] (b) Calculate the capacity utilisation. [2]

4. Tarnfield Print produced 42,000 units last year with an average of 15 employees. This year it produced 46,800 units with an average of 18 employees. Calculate the percentage change in labour productivity. [4]

5. Bramwell Tiles holds a maximum of 900 boxes of tiles and a buffer stock of 180 boxes. It sells 120 boxes a week, its supplier’s lead time is 3 weeks, and each delivery arrives as inventory reaches the buffer stock. Inventory is 900 boxes at the end of week 0.

(a) Calculate the re-order level. [2] (b) State the re-order quantity. [1] (c) Complete the table and state the week in which the order is placed. [2]

End of week	0	1	2	3	4	5	6
Inventory (boxes)	900	?	?	?	?	?	?

(d) The lead time rises to 4 weeks but Bramwell keeps the same re-order level. Calculate the inventory level when the delivery arrives, and state what Bramwell should change. [2]

6. Linden Cycles makes 2,000 bike frames a year. Each frame has a variable cost of £64, and fixed costs of £36,000 a year would be saved if it stopped making frames. A supplier offers frames at £78 each.

(a) Calculate the annual saving from buying the frames. [3] (b) State one non-financial reason for Linden to keep making its frames. [1]

7. Orrin Footwear makes trainers in batches. Explain one advantage and one disadvantage to Orrin of moving to mass customisation. [4]

8. Halden Roasters buys coffee beans from many small farms. Explain two benefits to Halden of supply chain transparency and third-party accreditation of its suppliers. [4]

9. Pinewell Foods inspects ready meals at the end of its production line. Its defect rate is rising.

(a) Explain the difference between quality control and quality assurance. [2] (b) Analyse two costs of poor quality to Pinewell. [4]

10. Cove Lane Ice Cream makes and sells ice cream in a seaside town. Summer demand is about four times winter demand. It employs full-time staff all year and makes ice cream to order. Evaluate whether Cove Lane should use flexible labour or build up inventory to match supply to demand. [16]

11. Arkwell Furniture holds large inventories of timber and fittings (a just-in-case approach). Its managers want to adopt lean production, including Just in Time and Kaizen. One supplier delivered two weeks late last year. Evaluate whether Arkwell should adopt lean production. [12]

Answers

1. Lead time is the time between placing an order and receiving it [1]. Buffer stock is the minimum inventory kept as a safety margin against late deliveries or unexpected demand [1]. Examiner insight: A definition that just repeats the term (“buffer stock is stock kept as a buffer”) explains nothing, so say what it protects against.

2. (a) 1,560 ÷ 120 [1] = 13 minutes per customer [1]. (b) 48 ÷ 640 × 100 [1] = 7.5% [1]. Examiner insight: Write the unit (“minutes per customer”) and the % sign; a bare 13 or 7.5 leaves the examiner to guess what you mean.

3. (a) Total costs = 9,800 + (1.80 × 7,000) = £22,400 [1]; unit cost = 22,400 ÷ 7,000 = £3.20 per mug [1]. (b) 7,000 ÷ 8,000 × 100 [1] = 87.5% [1]. Examiner insight: Unit cost uses actual output (7,000), not capacity (8,000); dividing by 8,000 gives £2.80, which is wrong.

4. Last year: 42,000 ÷ 15 = 2,800 units per employee [1]. This year: 46,800 ÷ 18 = 2,600 units per employee [1]. Change = (2,600 − 2,800) ÷ 2,800 × 100 [1] = a fall of 7.14% [1]. Examiner insight: Output rose by about 11.4%, but productivity fell, so make the direction clear (a fall, or −7.14%) and don’t confuse the two measures.

5. (a) Re-order level = buffer + (usage × lead time) = 180 + (120 × 3) [1] = 540 boxes [1]. (b) 900 − 180 = 720 boxes [1]. (c) 780, 660, 540, 420, 300, 180 [1]; the order is placed at the end of week 3, when inventory reaches 540 [1]. (d) 540 − (120 × 4) = 60 boxes when the delivery arrives, so 120 boxes of buffer stock are used [1]. Bramwell should raise its re-order level to 180 + (120 × 4) = 660 boxes [1]. Examiner insight: When you amend a chart, recalculate from the new figures; carrying over the old lead time gives an answer that looks tidy but is wrong.

6. (a) Cost to make per frame = 64 + (36,000 ÷ 2,000) = £82 [1]; saving per frame = 82 − 78 = £4 [1]; annual saving = 4 × 2,000 = £8,000 [1]. (b) Any one: control over quality; control over delivery timing; protects design know-how; avoids dependence on one supplier [1]. Examiner insight: Include the £36,000 fixed costs only because they would be saved; a cost that continues either way should not be part of the comparison.

7. Advantage: each customer can choose colours or fit [1], so Orrin can charge a premium price while keeping unit costs close to large-scale production [1]. Disadvantage: it needs costly technology and online ordering systems [1], which raise set-up costs and may take years to pay back if demand for custom trainers is small [1]. Examiner insight: “Explain” needs a reason for each point; the second mark comes from the consequence for Orrin, not from naming a second advantage.

8. Transparency lets Halden show customers where its beans come from and how farmers are treated [1], supporting ethical branding and possibly a higher price [1]. Accreditation means an independent body checks suppliers meet set standards [1], which reduces the risk of a scandal over working conditions that could damage Halden’s reputation [1]. Examiner insight: Use the context (many small farms that Halden cannot inspect itself); a list of general benefits with no link to coffee sourcing gains less.

9. (a) Quality control inspects finished meals to find faults [1]; quality assurance builds checks into each stage to prevent faults happening [1]. (b) Faulty meals are scrapped or reworked, so materials and labour are wasted and unit costs rise [1], cutting Pinewell’s margins [1]. If faulty meals reach shops, retailers may return them or stop stocking the brand [1], and food-safety concerns could damage its reputation and lead to legal claims [1]. Examiner insight: “Analyse” asks for a chain of reasoning: cost, then effect on unit cost or sales, then effect on profit or reputation.

10. Indicative answer:

• Flexible labour means temporary, part-time, agency or zero hours staff [1]; Cove Lane could hire extra staff for summer only [1], so its wage bill follows demand instead of paying idle full-time staff in winter [1], which lowers average unit costs over the year [1].
• But seasonal staff need training [1] and may be less committed, so service and product quality at the busiest time could fall [1], and zero hours contracts may attract ethical criticism [1].
• Building inventory means making ice cream in quiet months to sell in summer [1]; this keeps the existing full-time staff busy all year [1] and uses capacity evenly [1].
• But frozen storage is costly [1], ice cream has a limited shelf life [1], and making in advance does not suit making to order [1].
• Judgement: flexible labour fits a fourfold peak in a perishable product better than inventory [1], provided Cove Lane can recruit and train reliable seasonal staff [1]; a mix (a small inventory of best-selling flavours plus summer staff) may work best, depending on freezer capacity and local labour supply [1]. [16] Examiner insight: Credit for evaluation depends on a justified judgement that uses the case (fourfold peak, made to order, perishable); a one-sided answer, or one that never decides, limits the evaluation.

11. Indicative answer:

• Lean production cuts waste; JIT means supplies arrive only when needed [1], so Arkwell would free cash tied up in timber and cut storage costs [1].
• Kaizen involves staff in continuous small improvements [1], which could raise productivity and quality over time [1].
• But JIT depends on reliable suppliers [1]; a two-week delay like last year’s would halt production with no buffer [1], causing late orders and lost customers [1].
• Culture change and training take time and money [1], and staff used to large inventories may resist [1].
• Judgement: Arkwell could adopt Kaizen now, since it does not depend on suppliers [1], but should move to JIT only after securing reliable suppliers or keeping some buffer stock [1], so the decision depends on supplier reliability [1]. [12] Examiner insight: Use the late delivery in the case as evidence; “JIT is risky” with no reference to Arkwell’s own supplier is generic and weakens the judgement.

Where marks are usually lost

• Dividing total costs by capacity instead of actual output.
• Leaving out units or % signs on calculated answers.
• Reporting a change in output when the question asks for a change in productivity.
• Using the old lead time or usage rate after a chart has been amended.
• Including costs that would not change in a make-or-buy comparison.
• Naming advantages without explaining their effect on the business in the case.
• Treating JIT as all of lean production and forgetting Kaizen, standardised processes and teamwork.
• Writing an evaluation with no final judgement, or one not linked to the case.

Next steps

• Recap with the revision notes.
• Re-learn weak areas in the study guide.
• Course hub: OxfordAQA A-Level Business.
• Tick off topics on the printable checklist.
• Try all free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

OxfordAQA International AS and A-level Business (9725) specification, Version 1.1, for International AS exams May/June 2027 onwards and International A-level exams May/June 2028 onwards, published by OxfordAQA. Section 3.2.1 Operational performance.