Formative and Summative assignments Entrepreneur

Module 8 – FORMATIVE ASSESSMENT

Learner Full Names:

Surname:

Only fill in your answers in the provided columns to the right hand side of the page.

Question 1: Match each of the following words to the statements below (e.g.

1.1

– c,

1.2

-b)

a. Productivity b. Capacity

c. Operations management

d. Transformation process e. Production

Nr:

Statement:

Nr:

Your

Answers

The greatest possible workload the operations of an organisation can handle.

Efficiency with which an organisation turns production inputs into outputs.

1.3

Organising resources in order to meet a customer’s requirements.

1.4

Systematic direction and control of the processes that change inputs into outputs.

1.5

An activity that takes one or more inputs, changes the physical characteristics of these inputs and adds value to them for the customer.

Total question 1

/5

Question 2: Choose the
CORRECT
answer by selecting a or b.

Statement or question:

2.1

The purchasing function plays a very important role in the allocation of a) scarce production aids or

b) raw materials

2.2

Savings on purchasing has a direct effect on the of an enterprise. a) efficiency or

b) profitability

2.3

Administrative planning consists of the establishment of that can effectively determine needs.

a) material estimates or b) procedures

2.4

When all the purchasing responsibilities are allocated to different divisions, individuals or geographically distributed operations, it is known as purchasing.

a) centralised or b) decentralised

2.5

Maintenance stock consists of .

a) Raw materials, parts and components that are used in the manufacturing process or

b) Goods, smaller production parts and cleaning products used in the production process

Total question 2

Question 3: Choose one concept or explanation from the list below, that best describes each group of words that follow.

a. Job design.

b. Job description.

c. Job specification. d. Job profiling.

e. Job analysis.

f. Job enlargement g. Job enrichment

h. Job rotation

Word groups:

Your Answers:

3.1

Document containing tasks, duties and responsibilities for a specific job.

3.2

Combining tasks to form complete jobs.

3.3

Collecting information about a job to establish tasks, duties and responsibilities of a position.

3.4

The description of a job in terms of its required outcomes.

3.5

Written document that describes the abilities, skills, qualifications and characteristics for a specific job.

3.6

The vertical expansion of a job that allows the worker to do a complete activity and assess and correct his own performance.

3.7

Increase in the number and variety of tasks that an individual performs.

3.8

Increasing variety by permitting workers to shift to other jobs periodically to

reduce boredom and distribute unpleasant jobs.

Total question 3

/8

Question 4: Fill in the missing words from the list below:

a. Just wage

b. Acceptable wage c. Competitive wage

d. Wage with increment

Answers:

4.1

A makes provision for an increasing wage, regardless of promotion to a higher post.

4.2

A _compares well with those of other employees in the region.

4.3

A is in accordance with the requirements of the position which the em- ployee must fill.

4.4

A enables the employee to provide at least in his / her basic needs and to maintain a satisfactory standard of life

Total: question 4

/2

Question 5: Read each statement carefully then state true or false in the space provided.

Your Answers

5.1

The liquidity of a business has nothing directly to do with its profitability.

5.2

The reliability of the value of the total assets of a business is not so critical when calculating solvency.

5.3

A high return on investment is proof of management’s ability to add value to

the enterprise.

5.4

Return on equity indicates the rate of return on total capital or the profitability of a business.

5.5

Trade creditors and shot-term loans are examples of net working capital

5.6

Sometimes over the short term it is wise to forget about profitability issues and to make sure that major liquidity threats are immediately addressed.

5.7

The break-even point of a business is the level of business where the income from its sales is equal to the cost of sales.

5.8

For a retailer fixed costs, also called direct costs, consists of the cost price of a product the retailer pays to the supplier.

5.9

Marginal income refers to the positive difference between selling price per unit minus the direct cost price per unit.

5.10

The total indirect costs of a business vary according to the volume of sales.

Total question 5

/10

Question 6: Choose
one type of budget
from the list below, that best matches each definition or statement that follows.
Write down the corresponding letter (a/b/c etc.) in the answer column:

a. Master budget b. Sales budget

c. Purchases budget d. Production budget

e. Labour budget

Definition or Statement

6.1

It has an influence on many other budgets.

6.2

If a small business does not produce goods but buys and sells, it must draw up this budget.

6.3

Without this budget you may find that you do not have enough staff to complete your required production.

6.4

Compiled from a number of different budgets.

6.5

This budget helps you to ensure that the correct amount of stock is carried in your business.

Total question 6

TOTAL FORMATIVE 8

/35

Question 2: Select from
column

A
the correct answer to match
column

B
.

Match the factors that influence the form of business ownership in column A with the descriptions in column B:

Your Answers:

a) Liability and accountability

2.1

Lifespan of the business.

b) Continuity

2.2

Separate (from owner) legal entity.

2.2

c) Legal personality

2.3

Statutory requirements that must be complied with.

2.3

d) Legal requirements

2.4

Requirements on how financial record must be kept

e) Accounting requirements

2.5

Responsibility for possible debts and other legal obligations of a business.

Total question 2

(
3
)

Student Number:

Question 3: Read each statement carefully then state
true

or

false
in the space provided.

Statement :

Your

3.1

An entrepreneur is a high risk-taker who will enthusiastically embrace a new or original concept that has not been tried before.

3.2

Large corporate companies, in most of the successful world economies are the biggest contributors to job creation.

3.3

Entrepreneurs have the freedom to choose and make their own decisions—they answer to no-one.

3.4

All SMMEs are owned or managed by entrepreneurs.

3.5

Entrepreneurs are also small business managers as they manage their own enterprises to ensure permanence and growth.

3.6

Innovation deals with finding an idea for a new product.

3.7

A viability study is an in-depth investigation of the profitability of a business idea to be converted into a business enterprise.

3.8

A feasibility study largely focuses on the entrepreneur’s ability to convert an idea into a small business enterprise.

3.9

General Motors practises niche marketing when it sells specific models for different income and age groups

3.

10

Nike practises segment marketing by selling athletic gear for basketball, running, and soccer.

Total question 3

/10

Question 4: Choose the
CORRECT
answer by selecting
a

or

b.

Statement:

Your Answers

4.1

‘Customised marketing’ involves …

a) Tailoring brands and promotions to the needs and wants of local customer groups.

b) Tailoring products and marketing programs to the needs and preferences of individual customers.

4.2

Demographic segmentation consists of …

a) Dividing the market into groups based on variables such as income and nationality.

b) Dividing the market into groups based on variables such as social class and life style.

4.3

Shopping products are products that …

a) Consumers consume regularly and purchase frequently.

b) Consumers spend more time on to locate since they are relatively more expensive.

4.4

A referenced price serves as an ___ standard against which the customer evaluates other prices.

a) internal or

b) external

4.5

When some businesses set high initial prices to attract first-time buyers who are willing to pay a premium price to own the new product, it is called …

a) Penetration pricing

b) Price skimming.

Total question 5

Question 5: Choose the appropriate
word

or

concept
for the following statements. Select only one from the list below for each statement and write down the corresponding letter
(a/b/c

etc.)
in the answer column.

a. Advertising

b. Sponsorship

c. Publicity

d. Sales promotion

e. Personal selling

5.1

News reports about a new, tasty, nutritious dieting product.

5.2

Designed to intensify the efforts of the sales force and make it easier to generate sales.

5.3

Non-personal, paid marketing message.

5.4

Primarily involves the relationship and interaction between buyer and seller.

5.5

Financial support provided by a company in return for the rights to use the company’s name (brand) and logo in connection with a specific event

Question 6: Choose the appropriate
word

or

concept
for the following statements. Select only one from the list below for each statement and write down the corresponding letter
(a/b/c

etc.)
in the answer column.

Operations

management:

a. Productivity

b. Capacity

c. Batch production

d. Mass production

e. Job production

6.1

Manufacturing a number of identical items either to meet a specific order or to meet a continuous demand.

6.2

Products are made to satisfy a specific order from a customer.

6.3

The efficiency with which an organisation turns production inputs into outputs.

6.4

The greatest possible workload that a business can handle within a certain period.

6.5

Manufacturing the same type of product to meet the continuous demand for that specific product.

Total question 6

Question 7: Choose the
CORRECT
answer by selecting
a

or

b.

Statement or question:

7.1

One of the internal factors that influence Human resource planning is … a) The nature of the work or b) Trade union requirements

7.2

…refers to the situation when people leave the company, for whatever reason. a) Net change or b) Attrition

7.3

… refers to the way tasks are combined to form complete jobs a) Job enrichment or b) Job design

7.4

Aptitude tests are designed to …

a) Measure the candidate’s ability to learn specific jobs or skills or

b) Determine how well the candidate is able to do the job.

7.5

Choosing the most suitable candidate from a pool of candidates is called … a) screening or b) selection

Total question 7

Question 8: Match the concepts in column A with the descriptions in column B:

a) Current asset

8.1

Return on investment

b) Capital

8.2

The ability of an enterprise to pay off all its liabilities if it should stop to operating at any given time.

8.2

c) Profitability

8.3

Money needed to acquire vehicles, manufacturing equipment, etc. Sometimes called liabilities.

8.3

d) Liquidity

8.4

Owned by the enterprise and can be turned into cash within 12 months

8.4

e) Solvency

8.5

The ability of an enterprise to pay its short-term financial commitments continuously and on time.

Total question 8

Question 9: Read each statement carefully then state
true

or

false
in the space provided.

9.

1

Return on equity indicates the profitability of the business as a whole.

9.2

Trade credit is a form of current capital.

9.3

A profitable small business can go bankrupt as result of liquidity problems.

9.4

Factoring, a form of medium-term finance, is not readily available to small businesses.

9.5

Mortgage bonds can be used to acquire furniture and fittings for a business.

Total question 9

TOTAL: SECTION A

/50

Question:

Mark:

9.

Generate a business idea from everyday activities to start your own
micro
business.

a. Explain what product/service you will be providing. What will the chief activities of this business be? (5)

b. Why do you want to pursue this idea? Do you have the support and motivation to pursue such an idea? Motivate your answer. (3)

c. Discuss your target market — who are your customers? (3)

d. Do you have the skills and means to meet your customers’ needs? (3) e. How will you market your idea to your customers? (3)

f. Explain the difference between the feasibility and viability of the business idea. (3)

15

10.

Formulate a mission statement as well as 4 long-term objectives for your business.

11.

Prepare a cash budget for the first 2 months of your own business

10

12.

a. Using the chief activities of your business, do a job analysis and identify possible jobs / positions in your business (5)

b. Prepare a job description and job specification for one of these positions (10).

13.

Discuss five important considerations when choosing the right sources and forms of finance.

14.

Why is a thorough knowledge and understanding of financial management so important for an entrepreneur? Your explanation should also include how financial management relates to and integrates with the other functional areas of a business.

15.

Briefly explain five unique problems that small business entrepreneurs face in obtaining finance.

TOTAL:SECTION B

75

QUESTIONS: CASE STUDY 1

16.

a. Do you regard Martha as an entrepreneur? Please provide reasons for your point of view.

b. Do you regard her business as a micro, small or medium enterprise? Please provide a reason for your answer.

3
2

17.

a. Name the variables in the macro environment that may have an influence on her business.

b. Explain to Martha, with the help of suitable examples, which of these variables will be more likely to influence the operation and success of her business.

4

18.

a. Explain a creativity technique that you can use to help Martha to generate more business ideas.

b. Further develop Martha’s business idea by using a bow-tie diagram.

5

19.

a. What are the questions that Martha needs to answer when formulating a mission statement for her business?

b. Formulate a mission statement for Martha’s business.

7
3

Total case study 1

35

Cඉඛඍ ඛගඝඌඡ 2

Please refer to the business plan for Ntombi’s Milk Market (Appendix A)

of your prescribed book ( pages 333—352) when answering the following questions:

QUESTIONS: CASE STUDY 2

20.

a. Explain what a viable business idea is.

b. If the average Mamelodi household (Average income = R3000 p.m.) spends 2% of their monthly income on milk, and the business- to- business market amounts to R80 000 per month, calculate the potential rand value of Ntombi’s Milk Market’s (NMM) market.

c. Define indirect costs and give 3 examples of NMM’s indirect costs

3
3

21

a. Calculate the break-even point for NMM.

b. How can NMM lower their break-even point? Explain at least two ways.

22.

a. Classify all NMM’s products in terms of the consumer product category.

b. To which category (according to your text book) of the product-service mix does NMM belong? Give a reason for your answer

23

a. What factors may have affected the pricing of NMM’s products?

b. What pricing objective do you think NMM has adopted? Give a reason for your answer.

24

a. Discuss the types of channels of distribution that a business can use.

b. What type of channel does NMM use? Please motivate your answer.

25

Calculate the Re-order point (ROP) for a small dairy shop that buys milk from NMM. The shop has an average monthly demand of 105 litres of milk. The order lead time is one week and the safety stock is five litres.

Total case study 2

40

TOTAL:SECTION C

75

TOTAL SUMMATIVE ASSIGNMENT 3

200