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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 goods and services flow from the producer to the consumer. These channels can involve direct sales or intermediary entities such as wholesalers, agents, or retailers. In the case of John and Martin Quinn, these channels are essential for reaching their target consumers effectively.
Step 2
Illustrate by means of a diagram, the channel of distribution used by John and Martin Quinn.
Answer
A simple diagram representing the channel of distribution for John and Martin Quinn is as follows:
Producer -> Retailer -> Consumer
This diagram indicates that John and Martin sell their products to retailers who then sell those products to the end consumers.
Step 3
Outline four factors that John and Martin would take into account in setting a suitable price for their products.
Answer
- Cost of Production: They need to calculate all production costs to ensure the selling price covers these expenses, including research and development.
- Market Demand: The price should align with demand; higher demand might justify a higher price.
- Competitors' Prices: They must consider competitor pricing strategies to remain competitive.
- Government Regulations: Any applicable taxes or tariffs must also be factored into their pricing model, particularly for organic produce.
Step 4
Describe two methods to improve their Credit Control system.
Answer
- Assessing Creditworthiness: John and Martin should thoroughly check the financial backgrounds of their customers to ensure they are credible and able to pay.
- Prompt Payment Incentives: They could offer discounts for early payments to encourage customers to settle their bills quickly.
Step 5
Outline two benefits of preparing a Cash Flow Forecast.
Answer
- Informed Decision Making: A Cash Flow Forecast allows John and Martin to predict their cash inflows and outflows, helping them make strategic business decisions.
- Financial Planning: It assists in identifying potential cash shortages beforehand, enabling them to plan for future expenses more effectively.
Step 6
Identify two items that may be included in the Payments section of the Cash Flow Forecast.
Answer
- Cost of Raw Materials: This includes all expenses related to purchasing organic produce and livestock.
- Repayment of Loan: Any scheduled loan repayments that need to be accounted for should be included.