2.3.3b Controlling costs and gaining competitive advantage through quality Quiz: Pearson Edexcel Business, Unit 8

The 20 questions

1. How can improving product quality help a business control its costs?

   • By lowering staff wages
   • By reducing waste
   • By cutting marketing spend
   • By increasing output speed

2. How can high product quality provide a business with a competitive advantage?

   • By offering lowest prices
   • By speeding up delivery
   • By building reliability
   • By reducing staff training

3. A business's rejected items cost £3 each in wasted materials. It rejects 400 items in a month. How much is wasted?

   • £400
   • £133
   • £1,200
   • £3,400

4. A business improves quality so that rejects fall from 400 to 100 items a month, saving £3 per item. What is the monthly saving?

   • £1,200
   • £400
   • £300
   • £900

5. Which method allows a business to gain a competitive advantage through quality?

   • Offering longer warranties
   • Shorter return windows
   • Reduced safety checks
   • Cheaper raw materials

6. Why does consistently high product quality help a business retain customers?

   • It speeds up dispatch
   • It lowers retail prices
   • It increases advertising
   • It builds trust

7. A business spends £2,000 a month on quality checks and saves £2,600 a month in fewer returns. What is the net monthly saving?

   • £2,000
   • £600
   • £1,300
   • £4,600

8. How does high quality help a business control its costs over time?

   • More staff wages
   • Increased raw materials
   • Fewer customer returns
   • Higher marketing spend

9. Why might a business with higher quality products outsell a cheaper rival?

   • Reliability justifies price
   • Cheaper raw materials
   • Faster delivery times
   • Lower production costs

10. Why might investing in quality initially increase a business's costs?

    • Lower sales volume
    • Staff training expenditure
    • Reduced output prices
    • Immediate refund payouts

11. Which measure best shows that quality is successfully controlling costs?

    • Increasing staff turnover
    • Rising advertising spend
    • Falling return rates
    • Higher utility bills

12. What is a key reason why good quality reduces reputational risk?

    • Faster delivery times
    • Higher profit margins
    • Fewer public complaints
    • Cheaper advertising costs

13. A business has a unit cost of £8 and a selling price of £12. Quality improvements cut unit cost to £7 without changing the price. What is the new gross profit per unit?

    • £5
    • £4
    • £1
    • £8

14. Which strategy is most consistent with gaining competitive advantage through quality?

    • Promoting product guarantees
    • Cutting staff training
    • Discounting faulty stock
    • Lowering material specs

15. Which is an example of a non-price competitive advantage?

    • Lowest market price
    • Seasonal price cuts
    • Reliability and trust
    • Cheaper bulk discounts

16. A business reduces its rejects from 5% to 2% of 10,000 units, with a cost of £6 per rejected unit. What is the saving?

    • £600
    • £1,800
    • £300
    • £3,000

17. Why might a strong quality reputation allow a business to charge more?

    • Customer trust
    • Cheaper material inputs
    • Government price controls
    • Lower manufacturing costs

18. What is the main financial benefit of preventing product defects?

    • More expensive materials
    • Higher wage bills
    • Less wasted resources
    • Increased tax liability

19. What determines whether investing in quality brings a competitive advantage?

    • Factory rental costs
    • Customer valuation
    • Office location choice
    • Business loan rates

20. How does product reliability reduce the risk of losing customers to rivals?

    • Lowering selling prices
    • Building customer loyalty
    • Reducing store hours
    • Increasing product weight

Related quizzes

• Producing goods and providing services Quiz · 2.3.1a · 20 questions
• Job, batch and flow production processes Quiz · 2.3.1b · 20 questions
• Impact of technology on production: cost, productivity, quality and flexibility Quiz · 2.3.1c · 20 questions
• Interpreting bar graph stock charts and just in time stock control Quiz · 2.3.2a · 20 questions
• Procurement, supplier relationships and logistics Quiz · 2.3.2b · 20 questions
• Quality control and quality assurance Quiz · 2.3.3a · 20 questions
• Stages and skills of the sales process Quiz · 2.3.4a · 20 questions
• Importance of good customer service Quiz · 2.3.4b · 20 questions
• Changing technology, changing consumer wants and obsolescence Quiz · 1.1.1a · 20 questions
• Customer needs: price, quality, choice and convenience Quiz · 1.2.1a · 20 questions