Exam code: 9BS0
Read the following extracts (E to H) (opens in a new tab) before answering
Innocent Drinks has constructed the network diagram below to plan the launch of a new line of smoothies. Each number represents how many days each activity is estimated to take
Using the data in the network diagram above, calculate the Earliest Start Times (EST) and Latest Finishing Times (LFT) for each activity and identify the critical path.
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Read the following extracts (A to D) (opens in a new tab) before answering
For people in developing countries, purchasing a pair of VisionSpring glasses may be considered as an investment
Using the data in Extract B, calculate the average rate of return from purchasing a pair of glasses. You are advised to show your working.
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Read the following extracts (A to C) (opens in a new tab) before answering
Tended Ltd has constructed the decision tree below to help it decide whether to develop a new smartwatch or launch a new marketing campaign
The net gain for the new smartwatch is £1.3 million
Using the data in the decision tree, calculate the net gain for the marketing campaign. State your answer to two decimal places. You are advised to show your working.
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Read the following extracts (E to H) (opens in a new tab) before answering
The Chief Executive has calculated the new bathroom project will not meet its payback target of three years
Using the data in Extract F, calculate the difference in the payback period compared to the Chief Executive’s target. You are advised to show your working.
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Read the following extracts (E to G) (opens in a new tab) before answering
Explain one limitation of quantitative sales forecasting for Zara
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Read the following extracts (E to H) (opens in a new tab) before answering
Using the information in Extract F, calculate the three period moving averages for the percentage of rooms occupied for the periods March to May and June to August to two decimal places, stating the difference between these moving averages. You are advised to show your working.
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Extract A
Kingsdown Events Ltd
Kingsdown Events Ltd organises outdoor food and music events across the South West. In 2025 it used a decision tree to decide whether to run a two-day event at a new coastal site.
The tree gave the new site an expected value of £86,000 against £61,000 for its usual inland venue. Kingsdown chose the coastal site.
The probabilities were set by the events manager, based on her judgement of how likely good weather and strong ticket sales were. No historical data existed for the new site.
Heavy rain on the second day cut attendance by 60%. The event made a loss of £14,000.
Managing Director Owen Hartnell said: "The maths was fine. The numbers we put into it were guesses in a smart jacket."
Using Extract A, explain one limitation of using a decision tree for Kingsdown Events Ltd
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Extract E
Larkfield Modular Ltd
Larkfield Modular Ltd manufactures and installs modular classroom buildings. A typical school project involves 14 separate activities, some of which can run at the same time and some of which cannot.
For a project in Dorset, groundworks must finish before the modules can be craned into place, but the electrical first fix can be prepared in the factory while the groundworks are under way.
Before starting, Larkfield maps every activity, its duration and what must be completed first. The map showed the project would take 46 days, and identified six activities where any delay would push the whole completion date back.
Schools can only be built during the summer holiday, a 48-day window.
Operations Manager Iwan Prys said: "We have two days to spare in a 48-day window. We need to know which activities cannot slip."
Using Extract E, explain one purpose of critical path analysis for Larkfield Modular Ltd
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Extract A
Thornbeck Laundry Ltd
Thornbeck Laundry Ltd runs a commercial laundry serving hotels across the Lake District. It is considering investing £180,000 in three new tunnel washers.
The business uses net present value to appraise investments, applying a discount rate of 10%.
Finance Manager Owen Docherty said: "A pound saved in three years' time is not a pound today, and the board needs to see that."
Using the data in Extract A, calculate the net present value of the investment in three new tunnel washers. You are advised to show your working
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Extract B
Kelbrook Data Centres Ltd
Kelbrook Data Centres Ltd operates two data centres in the Midlands. It is appraising a £3.4m investment in liquid cooling to replace its air-cooled system.
The finance team calculated a payback period of 4.2 years and an average rate of return of 14%, using forecast electricity savings over an eight-year life.
Those forecasts assume electricity prices rise by 3% a year. Prices rose by 19% in one year in 2022 and fell by 7% the following year.
The appraisal also assumes the equipment lasts eight years. The manufacturer's warranty is five.
Finance Director Grace Mbeki said: "Every number past year two is an opinion."
Using Extract B, explain one limitation of the investment appraisal carried out by Kelbrook Data Centres Ltd
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Read the following extracts (E to H) (opens in a new tab) before answering
Buy it Direct’s new Operations Director is in charge of installing a new IT system for the warehouses. This project must be completed within 45 weeks. The Operations Director has produced the following network diagram:
Activity A: Identify problem
Activity B: Consult with software supplier
Activity C: Recruit staff
Activity D: Staff training
Activity E: Discuss IT solution
Activity F: Order equipment from suppliers
Activity G: Implementation and testing
Assess the limitations of using Critical Path Analysis (CPA) to manage the installation of the new IT system.
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Read the following extracts (E to H) (opens in a new tab) before answering
Assess two limitations for Buy It Direct of carrying out investment appraisal before setting up the new bathroom division
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Extract A
Universal Music Group
Universal Music Group (UMG) is the world's largest music label, responsible for producing and distributing music. It has the largest market share, with 33.90%, followed by Sony Music Entertainment with 26.91%, Indies with 23.21% and Warner Music Group with 15.98%
UMG's artists include American and British acts: Taylor Swift, Kendrick Lamar, Elton John, and Sabrina Carpenter. UMG receives a proportion of each artist's sales of music.
In 2024 its revenue increased by 14.4%, helped by the strong sales for The Tortured Poets Department by Taylor Swift. In the UK alone the album has moved 255,515 copies on physical formats.
However, the potential of Artificial Intelligence (AI) to use artist material owned by UMG and TikTok's global influence on music consumption, provide challenges to UMG.
(Source: adapted from https://www.universalmusic.com and https://www.musicbusinessworldwide.com)
Extract B
Rough Trade Records
Rough Trade is an independent record store, with 7 shops in cities including London and Liverpool.
Its owners are happy to remain small. They avoid locating in areas that already have a strong independent record shop, so as not to create competition for that store. The owners recognise that there are probably 5 or 6 cities where it could open a new Rough Trade record store.
For the year ending December 31, 2022, Rough Trade’s Sales Revenue was £14 348 884, Gross Profit of £5 210 500, and Operating Profit was £528 330. Rough Trade’s cost of sales and operating expenses both increased significantly during 2022.
Rough Trade pay its staff well above the minimum wage. It makes sure its staff have a good working environment and have the support they need to give great customer service. It also paid out a profit bonus to all staff.
Rough Trade increased its share of the UK market for vinyl to 8.4% (up from 7%). Sales of books and turntables also increased.
(Source: adapted from https://www.musicweek.com)
Extract C
Emerging markets and the global music industry
The music industry's focus has slowly moved towards emerging markets. Labels such as UMG brought Western music influences into these markets through international marketing of global artists. However, regional scenes and local artists are taking on global sounds. K-pop, Reggaeton and Afrobeats are examples of this influence. Sales of artists, such as Tiara Andini in Indonesia and Chris Mj in Chile, are expected to grow.
Emerging markets are vital for streaming services and major labels. Spotify and Apple Music were late to realise the potential of emerging markets. This allowed local streaming services such as JioSaavn in India to provide local consumers with easier access to local music. It also enabled local artists to find new opportunities to become superstars in their home markets. These local streaming services lack a global presence, but successfully focus on regional music.
European and North American artists who are looking for global relevance are turning to local sounds and cultures to differentiate their music.
(Source: adapted from https://www.midiaresearch.com)
Using SWOT analysis, assess two threats to Universal Music Group (UMG).
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Extract A
Frampton Drinks Ltd
Frampton Drinks Ltd makes chilled fruit drinks at a single factory in Herefordshire, supplying supermarkets and independent cafés across the UK.
Its Operations Director uses time series analysis on eight years of quarterly sales to forecast demand and plan production, staffing and fruit purchasing. Fruit is bought on twelve-month contracts, so each forecast commits Frampton to a volume a year in advance.
The four-quarter moving average shows an underlying upward trend of about 3% a year. Seasonal variations calculated from past data are used to adjust every quarterly forecast.
Managing Director Marek Sadowski said: "The model has been right for eight years. That is exactly what worries me."
Extract B
Frampton Drinks Ltd quarterly sales (000 litres)
Extract C
The UK chilled drinks market
Trade body figures show the whole chilled drinks category rose 22% in the summer of 2025 during an unusually hot spell, then fell back in the cooler, wetter summer of 2026.
Two low-sugar competitors entered the market in 2026 and between them took an estimated 5% share.
Supermarkets have shortened their order lead times from twelve weeks to three, expecting suppliers to respond to demand more quickly than in the past.
Assess two limitations for Frampton Drinks Ltd of using time series analysis to forecast its sales
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Extract A
Quarrendon Coffee Roasters Ltd
Quarrendon Coffee Roasters Ltd roasts and sells speciality coffee from a single site in Bristol, supplying 140 independent cafés. Demand has outgrown its capacity.
The board must choose between two options:
Option 1: build a second roastery, at a cost of £480,000, ready in 14 months
Option 2: outsource the additional roasting to a contract roaster in Belgium, at a set-up cost of £60,000, starting in six weeks
The Finance Director has built a decision tree. The probabilities were agreed at a board meeting, drawing on the directors' experience and three years of sales data.
Extract B
Quarrendon Coffee Roasters Ltd - decision tree data
After deducting the cost of each option, the Finance Director calculated net expected values of £120,000 for building the second roastery and £312,000 for outsourcing.
Extract C
Quarrendon's market
The UK speciality coffee market grew 7% in 2026. However, three of Quarrendon's largest café customers were bought by a national chain that roasts its own coffee.
Outsourcing would mean Quarrendon no longer controls its roast profiles. Two of its café customers have said the roast is the reason they buy.
The sterling-euro exchange rate moved by 9% during 2026.
Assess two benefits to Quarrendon Coffee Roasters Ltd of using a decision tree to choose between the two options
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Extract A
Aurelia Kitchens Ltd
Aurelia Kitchens Ltd is a privately owned UK manufacturer of premium fitted kitchens. The business designs, manufactures and installs kitchens for domestic customers across the UK. Aurelia positions itself as a high-quality brand, competing on design, durability and customer service rather than low prices.
Aurelia Kitchens Ltd was founded in 2008 by two former furniture designers. The business operates from a single manufacturing site in the West Midlands and employs 165 people. Aurelia sells its kitchens through a network of 12 UK showrooms, all owned by the business.
Demand for fitted kitchens increased during 2020 and 2021, as more people invested in home improvements. Aurelia experienced strong sales growth during this period and expanded its workforce by recruiting additional skilled production workers and installation teams.
Aurelia's management team believes that long-term growth will depend on improving productivity at its factory and making strategic investment decisions to support future demand.
Extract B
Employment and productivity at Aurelia Kitchens Ltd
Aurelia's managers are reviewing labour productivity and unit costs. Some experienced workers have raised concerns that recent recruitment has reduced average skill levels on the factory floor, increasing the need for supervision and training.
Extract C
Investment options under consideration
Aurelia is considering investing in new computer-controlled cutting and assembly machinery. The machinery would automate several stages of the production process and reduce reliance on manual labour.
The proposed investment would cost £2.4 million and is expected to last five years, with no residual value. Forecast cash inflows from the investment are shown below.
Aurelia's management uses a discount rate of 9% when appraising investment projects.
Extract D
Growth strategy
Aurelia's sales director has suggested expanding into the European market, beginning with Ireland and the Netherlands. This would involve exporting kitchens manufactured in the UK and working with local installation partners.
However, some directors favour focusing on the UK market and increasing capacity at the existing factory. They argue that exporting would increase complexity, currency risk and delivery times, potentially damaging Aurelia's reputation for customer service.
The directors must decide which growth strategy is most suitable for Aurelia over the next five years.
Using the data in Extract C, assess whether Aurelia Kitchens Ltd should invest in the new computer-controlled machinery.
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Read the following extracts (A to D) (opens in a new tab) before answering
Live the Adventure Ltd is deciding whether to expand its existing operations or to offer winter activity holidays in Europe in order to grow
Using the data in Extract D, calculate the values of A, B, C and D and, using other non-financial information, evaluate these two options.
Recommend which one of these two options Live the Adventure Ltd should choose in order to grow.
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Read the following extracts (E to H) (opens in a new tab) before answering
Using the data in Extracts E to H, Payback and NPV investment appraisal methods, evaluate Plan A and Plan B expansion plans and recommend which one might be better for Northfield Cycles.
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Extract A
Marden Leisure Ltd
Marden Leisure Ltd operates three indoor climbing centres in the North of England. It is converting a former warehouse in Leeds into a fourth centre.
The conversion involves 16 activities. Marden's project manager has mapped each activity, its duration and what must be completed before it can start. The analysis shows the project will take 38 weeks.
Marden has pre-sold 1,900 annual memberships for the Leeds site on the promise that it will open by 1 June. There are 34 weeks between the start of work and 1 June.
Operations Director Sam Ogilvie said: "Thirty-eight weeks of work. Thirty-four weeks of calendar. That is the whole problem."
Extract B
Marden Leisure Ltd - activities on the critical path
Fit-out and staff training run together as a single activity. The safety inspection cannot begin until fit-out and staff training is complete.
Extract C
The two options
Option 1 - shorten the critical path. Marden would pay to save four weeks and open on 1 June. The cheapest combination available is one week from electrical first fix, two weeks from fit-out and staff training, and one week from structural steelwork, at a total cost of £38,000.
Option 2 - open four weeks late, on 1 July. Marden would give each of the 1,900 pre-sold members a £20 credit, costing £38,000, and would lose four weeks of trading. Contribution at the Leeds centre is estimated at £11,500 a week, so the total cost would be around £84,000.
Extract D
Marden's position
Marden's Sheffield centre failed its first safety inspection in 2024 after the fit-out was compressed. Re-inspection took six weeks.
Climbing instructors must hold a recognised qualification before a centre can open to the public. Fit-out and staff training run together as a single activity.
A competitor is opening a climbing centre in Leeds in September.
June, July and August are the busiest trading months of the year for Marden's existing centres.
Marden Leisure Ltd cannot complete its Leeds conversion by 1 June. It is considering either paying to shorten activities on the critical path or opening four weeks late.
Evaluate these two options and recommend which one Marden Leisure Ltd should choose
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