Practice Exam 2
VCE Business Management Units 3 & 4 | 15 minutes reading time, 2 hours writing time
✎ Complete ALL questions on paper before opening the Model Answers lesson. No notes permitted. This paper has two sections: Section A (short-answer and extended-answer questions, 40 marks) and Section B (short-answer and extended-answer questions based on a case study, 35 marks). Total marks: 75. Aim for approximately 1 minute per mark.
SECTION A — 40 MARKS
Question 1 (4 marks)
Explain the three elements of an operations system – inputs, processes and outputs – using an example from a manufacturing business.
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Quality Management (a)
Question 2 (3 marks)
Distinguish between quality control and quality assurance.
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Quality Management (b)
Question 3 (3 marks)
Explain how a business could use Total Quality Management (TQM) to improve the quality of its outputs.
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Lean Management (a)
Question 4 (3 marks)
Explain the concept of lean management and outline one lean technique a business could use to reduce waste.
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Lean Management (b)
Question 5 (3 marks)
Discuss one benefit and one limitation of implementing lean management in a large-scale manufacturing business.
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Question 6 (4 marks)
Explain the concept of waste minimisation and outline two strategies a business could use to minimise waste of materials or time.
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Question 7 (4 marks)
Explain how the introduction of new technology, such as robotics or automation, can improve productivity in a business. Outline one limitation of relying on technology.
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Question 8 (4 marks)
Explain the difference between Porter’s cost leadership and differentiation strategies, and recommend which would be more suitable for a manufacturing business entering a highly price-competitive market.
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Question 9 (4 marks)
Explain how a manager could use the management skills of planning and communication to successfully implement a new operations process.
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Question 10 (4 marks)
Explain the purpose of Key Performance Indicators (KPIs) in reviewing the performance of a business’s operations function. Give two examples of operations-related KPIs.
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Question 11 (4 marks)
Explain how a business’s corporate culture can influence the success of operational changes, such as the introduction of lean management.
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SECTION B — CASE STUDY — 35 MARKS
Case Study — Alpine Sports Gear Pty Ltd
Industry: Manufacturing (outdoor and snow sports equipment)
Alpine Sports Gear Pty Ltd is a Bendigo-based manufacturer of skis, snowboards and outdoor apparel, employing 150 staff and supplying major retailers across Australia and New Zealand. Founded in 1992, Alpine built a reputation for durable, locally-made equipment. Over the past two years, KPI reports show the business is under increasing pressure: net profit margin has fallen from 14% to 8%, product return rates have risen from 3% to 9% due to stitching and binding defects, employee turnover has increased from 10% to 19%, and market share has fallen from 18% to 11% as budget-conscious customers switch to cheaper imported brands manufactured using fully automated production lines overseas. Operations Manager Daniel Kovac has proposed a $4 million investment in automated cutting and stitching equipment, combined with a lean management program to reduce material wastage on the factory floor, currently running at 14% of raw material input. Several long-serving machinists have expressed concern that automation will eliminate their jobs and have been slow to engage with proposed changes. The Board has asked Daniel to prepare a plan that improves quality and productivity while managing the workforce transition responsibly.
Question 12 (5 marks)
Referring to the case study, identify and explain two Key Performance Indicators (KPIs) that indicate Alpine Sports Gear’s declining performance.
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Need for Change (a)
Question 13 (3 marks)
Referring to the case study, identify one internal pressure and one external pressure driving the need for change at Alpine Sports Gear.
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Need for Change (b)
Question 14 (3 marks)
Using Lewin’s Force Field Analysis, identify one driving force and one restraining force relevant to Alpine Sports Gear’s proposed automation, referring to the case study.
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Question 15 (6 marks)
Recommend and justify whether Alpine Sports Gear should adopt a low-risk or high-risk change management strategy to implement the proposed automation investment, referring to the case study.
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Operations Management (a)
Question 16 (3 marks)
Referring to the case study, explain how implementing lean management principles could help Alpine Sports Gear reduce its material wastage.
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Operations Management (b)
Question 17 (3 marks)
Referring to the case study, explain how a total quality management (TQM) approach could help Alpine Sports Gear reduce its product return rate.
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Question 18 (6 marks)
Explain how Daniel Kovac could use the management skill of communication to reduce employee resistance to the automation change.
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Question 19 (6 marks)
Evaluate whether a cost leadership strategy or a differentiation strategy, as described by Porter’s Generic Strategies, would better position Alpine Sports Gear against low-cost overseas competitors. Refer to specific details from the case study in your response.
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✓ Finished? Open the next lesson – Model Answers – to mark your work.
