ES1940
THE UNIVERSITY OF WARWICK
First Year Examinations: January 2020
INTRODUCTION TO ENGINEERING BUSINESS MANAGEMENT
Candidates should answer ALL FOUR QUESTIONS.
Time Allowed: 2 hours.
Only calculators that conform to the list of models approved by the School of
Engineering may be used in this examination. Standard graph paper and the
Examination Case Study will be provided.
Read carefully the instructions on the answer book and make sure that the particulars
required are entered on each answer book.
NOTE: This exam paper is formatted in Helvetica.
In future years, the preferred typeface will be Calibri.
,ES1940
_______________________________________________________________________
In your answers assume that it is the present day, i.e. January 2020.
_______________________________________________________________________
1. Referring to the information provided in the accompanying Case Study:
a) Use the Structure-Conduct-Performance model to review the market structure
and industry for the Company described in the Case Study. (18 marks)
b) Do you think the market structure of the Case Study firm is closest to Perfect
Competition, Monopolistic Competition, Oligopoly Competition or a Monopoly?
Remember to justify your answer by describing the characteristics of the
competition faced. (7 marks)
Total 25 Marks
_______________________________________________________________________
2. Consider the “5Ps of the Marketing Mix”. For the Company identified in the Case
Study;
a) What are the Company’s principal Products? Briefly discuss the range of
products and their intended markets as well as any features that you believe will
make them notable to customers within the market. (5 marks)
b) Discuss the Company’s approach to Pricing with regard to the various products
identified in part (a). (5 marks)
c) Explain the difference between the Company’s industrial and domestic products
in terms of their impact upon the Packaging criteria. (5 marks)
d) Briefly discuss the Company’s use of both narrowcast and broadcast advertising
in their Promotion strategy, clearly identifying the difference between these two
cases. (5 marks)
e) Explain what is meant by the last of the “5Ps” – Place, in the context of the Case
Study Company. (5 marks)
Total 25 Marks
_______________________________________________________________________
Continued…
2
,ES1940
_______________________________________________________________________
3.
a) Discuss what elements of cost contribute to the final selling price of a company’s
products. (5 marks)
b) Recent global economic conditions have led to large fluctuations in raw material
prices with resulting impact on the Case Study Company’s production costs. Give
two suggestions for methods that the Case Study Company could introduce in
order to cope with these instabilities and illustrate how these methods could be
implemented. (8 marks)
c) The Company currently absorbs overheads using direct labour hours (as
illustrated in the Case Study). The product manager wonders whether this
method of allocating overheads is appropriate. The Company’s objective, under
the current challenging economic environment, is to make a 20% profit margin on
its products wherever possible. Propose an alternative method for allocating
overheads, explain why you have selected this method and illustrate the impact
of your proposal on product costs and profit margins using the data in the Case
Study. (12 marks)
Total 25 Marks
_______________________________________________________________________
Continued…
3
, ES1940
_______________________________________________________________________
4.
a) The ‘Break-Even’ equation may be stated as:
𝐹
𝑥𝐵𝐸 = (𝑆−𝑉) (Equation Q4)
i) Briefly explain each term in the equation and the reasoning behind how this
equation is able to provide insight into how many items should be made in
order for a business to cover manufacturing costs and then make a
profit. (5 marks)
ii) What is the term in the denominator of Equation Q4 called? (1 mark)
iii) What adaptation needs to be made to the basic ‘Break-Even’ equation as
stated in Equation Q4 in order to calculate the break-even point for multiple
products? (2 marks)
b) Using the data provided in the accompanying Case Study, calculate the break-
even points for products A, B and C. (8 marks)
c) If the Company intends to achieve a target profit of £800,000, will this be achieved
by the forecast annual sales of each Product A, B and C? (4 marks)
d) The Company is considering investing in a £400,000 advertising campaign to
promote their new product lines. Assuming that this results in a proportional boost
in sales for each model A, B and C, how many more of each product will need to
be sold in order to still achieve the intended target profit but in addition, cover the
cost of the advertising campaign? (5 marks)
Total 25 Marks
_______________________________________________________________________
END OF PAPER
4
THE UNIVERSITY OF WARWICK
First Year Examinations: January 2020
INTRODUCTION TO ENGINEERING BUSINESS MANAGEMENT
Candidates should answer ALL FOUR QUESTIONS.
Time Allowed: 2 hours.
Only calculators that conform to the list of models approved by the School of
Engineering may be used in this examination. Standard graph paper and the
Examination Case Study will be provided.
Read carefully the instructions on the answer book and make sure that the particulars
required are entered on each answer book.
NOTE: This exam paper is formatted in Helvetica.
In future years, the preferred typeface will be Calibri.
,ES1940
_______________________________________________________________________
In your answers assume that it is the present day, i.e. January 2020.
_______________________________________________________________________
1. Referring to the information provided in the accompanying Case Study:
a) Use the Structure-Conduct-Performance model to review the market structure
and industry for the Company described in the Case Study. (18 marks)
b) Do you think the market structure of the Case Study firm is closest to Perfect
Competition, Monopolistic Competition, Oligopoly Competition or a Monopoly?
Remember to justify your answer by describing the characteristics of the
competition faced. (7 marks)
Total 25 Marks
_______________________________________________________________________
2. Consider the “5Ps of the Marketing Mix”. For the Company identified in the Case
Study;
a) What are the Company’s principal Products? Briefly discuss the range of
products and their intended markets as well as any features that you believe will
make them notable to customers within the market. (5 marks)
b) Discuss the Company’s approach to Pricing with regard to the various products
identified in part (a). (5 marks)
c) Explain the difference between the Company’s industrial and domestic products
in terms of their impact upon the Packaging criteria. (5 marks)
d) Briefly discuss the Company’s use of both narrowcast and broadcast advertising
in their Promotion strategy, clearly identifying the difference between these two
cases. (5 marks)
e) Explain what is meant by the last of the “5Ps” – Place, in the context of the Case
Study Company. (5 marks)
Total 25 Marks
_______________________________________________________________________
Continued…
2
,ES1940
_______________________________________________________________________
3.
a) Discuss what elements of cost contribute to the final selling price of a company’s
products. (5 marks)
b) Recent global economic conditions have led to large fluctuations in raw material
prices with resulting impact on the Case Study Company’s production costs. Give
two suggestions for methods that the Case Study Company could introduce in
order to cope with these instabilities and illustrate how these methods could be
implemented. (8 marks)
c) The Company currently absorbs overheads using direct labour hours (as
illustrated in the Case Study). The product manager wonders whether this
method of allocating overheads is appropriate. The Company’s objective, under
the current challenging economic environment, is to make a 20% profit margin on
its products wherever possible. Propose an alternative method for allocating
overheads, explain why you have selected this method and illustrate the impact
of your proposal on product costs and profit margins using the data in the Case
Study. (12 marks)
Total 25 Marks
_______________________________________________________________________
Continued…
3
, ES1940
_______________________________________________________________________
4.
a) The ‘Break-Even’ equation may be stated as:
𝐹
𝑥𝐵𝐸 = (𝑆−𝑉) (Equation Q4)
i) Briefly explain each term in the equation and the reasoning behind how this
equation is able to provide insight into how many items should be made in
order for a business to cover manufacturing costs and then make a
profit. (5 marks)
ii) What is the term in the denominator of Equation Q4 called? (1 mark)
iii) What adaptation needs to be made to the basic ‘Break-Even’ equation as
stated in Equation Q4 in order to calculate the break-even point for multiple
products? (2 marks)
b) Using the data provided in the accompanying Case Study, calculate the break-
even points for products A, B and C. (8 marks)
c) If the Company intends to achieve a target profit of £800,000, will this be achieved
by the forecast annual sales of each Product A, B and C? (4 marks)
d) The Company is considering investing in a £400,000 advertising campaign to
promote their new product lines. Assuming that this results in a proportional boost
in sales for each model A, B and C, how many more of each product will need to
be sold in order to still achieve the intended target profit but in addition, cover the
cost of the advertising campaign? (5 marks)
Total 25 Marks
_______________________________________________________________________
END OF PAPER
4
