™

Cambridge IGCSE

BUSINESS STUDIES 0450/22

Paper 2 Case Study February/March 2021
INSERT 1 hour 30 minutes

INFORMATION
• This insert contains the case study.
*6803863505-I*

• You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.

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Specialist T-shirts (ST)

Saanvi started ST as a sole trader business 15 years ago in country Z. ST is a successful business.
Sales have grown quickly as ST has a reputation for producing high quality products.

ST buys plain T-shirts and then adds a design onto the T-shirts for business customers. The design
could be a logo, name or a picture provided by the customer. The design makes each batch of
T-shirts different for each customer.

Three digital sewing machines were purchased by Saanvi at a cost of $12 000 each. They allow a
design to be produced on the computer which is transferred straight onto the T-shirt. These machines
speed up production and reduce labour costs.

When ST is very busy it cannot accept all orders. Appendix 2 shows two orders for T-shirts from
different businesses. Saanvi has to decide which order to accept.

ST products are high priced and are aimed at niche markets. ST is always looking for ways to
increase the added value of its products. Saanvi is considering producing T-shirts for the mass
market instead of niche markets as she thinks it will allow ST to expand faster. T-shirts that do not
have personalised designs could be produced using cheaper machines that are more efficient.
However, Saanvi will need to invest in additional sewing machines to do this. Her main concern is
that the mass market has many established businesses producing low priced standardised T-shirts.

ST require a new Operations Manager as the previous manager has just left. The previous manager
did not motivate the 30 production workers.

Recently the economy in country Z has moved into a slump. Saanvi is concerned about the effect
of this on ST’s revenue, even though the government is introducing policies to try to reduce
unemployment.

Appendix 1

Advertisement for ST products

ST is the only business to go to if you want high-quality T-shirts with your own design on them.

ST only use high-quality T-shirts for your own design. We offer a personal service that guarantees
you will be 100% satisfied with your T-shirts. No other company does that.

Call us today to discuss your requirements and join our many happy customers.
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Appendix 2

Information on two orders for ST products

Order A Order B

Quantity ordered 5000 1000

Price $20 $50

Variable cost per unit $10 $20

Additional expenses $25 000 $10 000

Number of times the customer

has ordered T-shirts in the 3 10
previous year

Appendix 3

Three applicants for the job of Operations Manager

Aarav Vivaan Sai

Qualifications in using
Qualifications Degree in management No qualifications
digital sewing machines

Able to use computer

Good communicator with programs when Able to repair digital
Skills
employees producing designs for sewing machines
T-shirts

2 years working as a
Sewing Machine
Operator in one clothing
20 years working for the factory.
1 year working as an same clothing
manufacturer: 3 years as a Supervisor
Assistant Operations
Experience in another clothing
Manager in a clothing 10 years as a Production factory.
factory Supervisor and 10 years
as Operations Manager. 2 years as an Assistant
Operations Manager in
a different clothing
factory.
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Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
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International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
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www.cambridgeinternational.org after the live examination series.

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Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
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 ™
Cambridge IGCSE

BUSINESS STUDIES 0450/22

*6803863505*

Paper 2 Case Study February/March 2021

1 hour 30 minutes

You must answer on the question paper.

You will need: Insert (enclosed)

INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.

INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
• The insert contains the case study.

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1 (a) Explain two advantages and two disadvantages of being a sole trader.

Advantage 1: ....................................................................................................................

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Advantage 2: ....................................................................................................................

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Disadvantage 1: ................................................................................................................

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Disadvantage 2: ................................................................................................................

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(b) Consider the two orders for ST products in Appendix 2. Which order should ST accept? Justify
your answer using relevant calculations.

Order A: ............................................................................................................................

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Order B: ............................................................................................................................

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Conclusion: .......................................................................................................................

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2 (a) Explain two ways Saanvi can increase the added value of ST products.

Way 1: ...............................................................................................................................

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Explanation: ......................................................................................................................

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Way 2: ...............................................................................................................................

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Explanation:.......................................................................................................................

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(b) To expand the business in the future ST need to decide whether to change from niche marketing
to mass marketing.

Consider the advantages of both methods. Which method should ST use? Justify your answer.

Niche marketing: ...............................................................................................................

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Mass marketing: ...............................................................................................................

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Recommendation: ............................................................................................................

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3 (a) Explain two benefits to ST of having well-motivated employees.

Benefit 1: ..........................................................................................................................

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Explanation: ......................................................................................................................

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Benefit 2: ..........................................................................................................................

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Explanation: ......................................................................................................................

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(b) ST need to recruit a new Operations Manager. Consider the advantages and disadvantages
of the three applicants in Appendix 3. Which of the applicants should ST employ? Justify your
answer.

Aarav: ...............................................................................................................................

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Vivaan: ..............................................................................................................................

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Sai: ...................................................................................................................................

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Recommendation: ............................................................................................................

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4 (a) Explain four reasons why high quality is important to ST.

Reason 1: .........................................................................................................................

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Reason 2: .........................................................................................................................

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Reason 3: .........................................................................................................................

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Reason 4: .........................................................................................................................

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(b) Consider how the following two changes might affect ST. Which change is likely to have the
most effect on ST’s revenue? Justify your answer.

• The business cycle in country Z moves into a slump

• The government of country Z focuses on reducing unemployment

The business cycle in country Z moves into a slump: ......................................................

...........................................................................................................................................

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The government of country Z focuses on reducing unemployment: ................................

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Conclusion: .......................................................................................................................

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Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
om

International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
.c

www.cambridgeinternational.org after the live examination series.

e
at

Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
-m

Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
m
xa

© UCLES 2021 03_0450_22_2021_1.8

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w