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Study the information supplied and answer the questions which follow: John and Martin Quinn are organic farmers in Co - Leaving Cert Business - Question 8 - 2009
Question 8
Study the information supplied and answer the questions which follow: John and Martin Quinn are organic farmers in Co. Wicklow. They supply organic vegetables and m... show full transcript
Worked Solution & Example Answer:Study the information supplied and answer the questions which follow: John and Martin Quinn are organic farmers in Co - Leaving Cert Business - Question 8 - 2009
Step 1
Explain what is meant by 'Channels of Distribution'.
Answer
Channels of Distribution refer to the pathways through which products pass from the producer to the consumer. It involves intermediaries such as wholesalers, agents, and retailers that facilitate the movement of goods. A well-defined channel helps ensure that products reach the target consumers effectively.
Step 2
Illustrate by means of a diagram, the channel of distribution used by John and Martin Quinn.
Answer
The channel of distribution for John and Martin Quinn can be visually represented as follows:
Producer -> Retailer -> Consumer
In this case, John and Martin produce organic vegetables and meat, which are then sold through retailers before finally reaching the consumers.
Step 3
Outline four factors that John and Martin would take into account in setting a suitable price for their products.
Answer
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Production Costs: All costs related to production, research, and development need to be calculated and included in the selling price to ensure coverage of expenses.
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Competitor Pricing: The price should be competitive and in line with similar products in the market to attract customers.
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Demand Level: The level of demand for organic products can influence pricing. Higher demand may allow for higher pricing.
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Government Regulations: Compliance with any government-imposed taxes or regulations on food products should be factored into the pricing strategy.
Step 4
Describe two methods to improve their Credit Control system.
Answer
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Regular Monitoring: Implement a system for regularly checking the creditworthiness of customers to minimize risk. This involves assessing the credit histories of customers before extending credit.
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Incentives for Prompt Payment: Offer discounts or other incentives to customers who pay their bills on time, encouraging responsible payment habits.
Step 5
Outline two benefits of preparing a Cash Flow Forecast.
Answer
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Financial Planning: A Cash Flow Forecast helps in predicting the movement of cash into and out of the business. It assists in planning for future financial needs and ensures the business can meet its obligations.
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Decision-Making: It provides essential information for decision-making regarding investments, borrowing, and resource allocation, allowing management to make informed choices for maintaining cash flow health.
Step 6
Identify two items that might be included in the Payments section of the Cash Flow Forecast.
Answer
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Operating Expenses: Regular payments such as salaries, utilities, and rent which cover the day-to-day operations of the business.
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Loan Repayments: Any scheduled repayments of loans that the business has taken out to support growth or manage cash flow.