Business · 4 Operations management

4.3.1 Methods of sustainable production of goods and services

Before you start

Businesses use resources — materials, energy, water — to produce goods and services, and pay for all of them.
Efficiency and lean production are about cutting waste to lower cost per unit (4.1.1).
A business's reputation and brand image affect whether customers choose it.
Cost per unit, price and profit margin: if costs rise and the price does not, profit on each unit falls.
Business answers are marked by skill: k for knowledge, app for applying it to the business in the question, an for analysis, eval for a justified decision.

Syllabus objectives covered (2)

how businesses can be more sustainable: using renewable energy, using fewer resources / less waste, reusing, recycling, developing environmentally friendly products, using environmentally friendly packaging
advantages and disadvantages of businesses becoming more sustainable

Part 1 of 7

What 'more sustainable' means, and the six ways

Sustainable production means producing goods and services in a way that meets people's needs now without damaging the environment or using up resources that future generations will need.
The syllabus names six ways a business can become more sustainable, and they are the backbone of this topic. Learn the list exactly: using renewable energy; using fewer resources / less waste; reusing; recycling; developing environmentally friendly products; using environmentally friendly packaging.
A useful way to remember them is by where they act. Energy: renewable energy. The production process: fewer resources, less waste, reusing, recycling. What the customer gets: environmentally friendly products and packaging.
The trap is writing 'be eco-friendly' or 'go green' as a method. Those are goals, not methods. A mark needs the method named — 'install solar panels to use renewable energy' — not the wish.

Part 2 of 7

Renewable energy, and using fewer resources

Renewable energy comes from sources that do not run out, such as the sun, wind and flowing water. A business can install solar panels on its roof, or buy its electricity from a supplier that generates it from renewable sources.
Why it is more sustainable: fossil fuels like coal, oil and gas will eventually run out and release greenhouse gases when burned. Renewable sources replace them.
Do not confuse renewable energy with saving energy. Switching off lights uses less energy — that belongs under 'using fewer resources'. Renewable energy is about where the energy comes from.
Using fewer resources / less waste means producing the same output with less material, energy and water, and throwing less away. Examples: machines that use less electricity, cutting materials in patterns that leave fewer offcuts, fixing leaks, and not over-producing food that is later thrown out.
This method overlaps with lean production. Less waste is more sustainable and lowers costs, which is why it is often the easiest method for a business to justify.

Part 3 of 7

Reusing and recycling are different

These two are listed separately, so an answer that treats them as the same thing loses the distinction the examiner is looking for.
Reusing means using an item again, for the same purpose or a new one, without breaking it down and remaking it. A drinks company that collects its glass bottles, washes them and refills them is reusing. So is a factory that sends goods out on wooden pallets and uses the same pallets again.
Recycling means processing waste material so that it can be made into new products. Plastic bottles are shredded and melted into new plastic; waste paper is pulped into new paper.
The test: is the item broken down and remade? No — it is reuse. Yes — it is recycling.
Why both help: they reduce the amount of new raw material needed and the amount of waste sent to landfill. Recycling uses energy to process the material, but usually less than making it from new raw materials. A business can recycle its own waste, use recycled materials in its products, or both.

Part 4 of 7

Environmentally friendly products and packaging

Developing environmentally friendly products means designing the product itself to do less harm to the environment during its life: made from sustainable or recycled materials, using less energy when customers use it, lasting longer or being repairable, or being recyclable or biodegradable when thrown away.
Examples: a washing machine designed to use less electricity and water; furniture made from wood from managed forests; clothing made from recycled fibres.
Using environmentally friendly packaging means packaging that does less harm: using less packaging, using recycled materials, or using packaging that can be recycled, reused (refill packs, returnable containers) or composted.
Keep the two apart in an answer. A refill pouch for hand soap changes the packaging. A soap made to use less water when rinsing changes the product.

Part 5 of 7

Advantages of becoming more sustainable

Always write advantages for the business unless the question says otherwise. 'It helps the planet' is true, but on its own it is not an advantage to the business. Link it to something the business gains.
Lower costs in the long run. Using less energy, material and water, and throwing less away, reduces costs. Solar panels cut electricity bills once they are installed. Lower costs can raise profit.
Better reputation and brand image. Many customers prefer businesses that damage the environment less, so a sustainable business can attract and keep customers, which increases sales.
Possibly a higher price. Some customers are willing to pay more for products they see as environmentally friendly, which can raise the profit margin.
Attracting and keeping employees. People may prefer to work for a business they are proud of, which can make recruitment easier and improve motivation.
Meeting laws and avoiding penalties. Governments may set rules on pollution, waste or packaging. A business that is already sustainable avoids fines and the cost of rushing to change later.
Winning business customers. Other businesses may want suppliers that help them meet their own environmental targets, so being sustainable can win or keep contracts.

Part 6 of 7

Disadvantages of becoming more sustainable

High initial costs. Solar panels, new efficient machines and redesigned products need a large cash outflow before any saving is made, which may require a loan and interest payments.
Higher costs per unit. Sustainable materials and packaging often cost more than the ones they replace, so either the price goes up or the profit margin falls.
Risk of losing price-sensitive customers. If prices rise, customers who care most about price may switch to cheaper rivals, reducing sales.
Time and disruption. Changing processes, finding new suppliers and training employees takes time and may interrupt production.
The benefits can be slow or uncertain. Savings on energy may take years to cover the cost of the equipment, and not every customer will notice or reward the change.
Notice the pattern that makes this topic good for 8-mark questions: most advantages arrive in the long run, and most disadvantages arrive now. That is the balance your evaluation should weigh.

Part 7 of 7

Weighing sustainability in a decision

A decision question on sustainability is marked k2, app2, an2, eval2. Build one developed advantage and one developed disadvantage from the stem first.
Example of a developed advantage: 'Solar panels would lower energy costs [k], cutting its $2 000 monthly electricity bill [app], so profit would rise once the panels are paid for [an].'
Use the numbers. If the stem gives a cost and a saving, divide one by the other to see how long the saving takes to cover the cost. A cost of $45 000 and a saving of $9 000 a year means 5 years. That turns 'it saves money in the long run' into evidence.
Then evaluate by asking what the decision depends on, and settling it with the stem. Can it afford the up-front cost? Do its customers care — or do they care more about price? Are rivals or the law pushing it to change anyway? How long before the saving covers the cost?
Strong evaluation reaches a decision and adds a reason the analysis did not contain: 'It should install the panels, because its largest hotel customers now require suppliers to cut emissions — the risk of losing them is greater than the cost of the loan.'

Worked examples

Example 1. GreenLeaf Juice makes orange juice, which it sells in single-use plastic bottles. It throws away 3 tonnes of orange peel each week. Its factory is powered by diesel generators. Outline two ways GreenLeaf Juice could make its production more sustainable. (4 marks)

Show the working

Outline, 4 marks: two methods, each with a link to GreenLeaf Juice. Name a method from the six, then tie it to a fact.
Scan the stem for problems — each one is a method waiting to be matched. Single-use plastic bottles: packaging. 3 tonnes of peel thrown away: waste. Diesel generators: energy.
Way one. Use renewable energy [k], for example solar panels to replace the diesel generators that power its factory [app].
Way two. Use environmentally friendly packaging [k], such as returnable glass bottles that can be washed and refilled, instead of single-use plastic bottles [app].
A third valid option would be less waste [k]: selling the 3 tonnes of peel a week to be used as animal feed or compost instead of throwing it away [app]. Only two are needed; extra ways do not earn extra marks.

Answer: GreenLeaf Juice could use renewable energy [k], installing solar panels to replace the diesel generators that power its factory [app]. It could also use environmentally friendly packaging [k], such as returnable glass bottles that are refilled instead of single-use plastic bottles [app].

Example 2. Crumb & Co makes biscuits sold in supermarkets. It sells 2 million packets a year in plastic wrapping. Compostable wrapping would cost 6 cents more per packet. Supermarket own-brand biscuits are cheaper than Crumb & Co's. A survey found that 40% of its customers want less plastic packaging. Explain one advantage and one disadvantage to Crumb & Co of switching to compostable wrapping. (6 marks)

Show the working

Six marks, one advantage and one disadvantage, each [k] + [app] + [an]. Both must be about the business.
Collect the facts: 2 million packets a year; 6 cents extra per packet; cheaper own-brand rivals; 40% of customers want less plastic.
Work out the extra cost, because a number is stronger application than 'more expensive'. 2 000 000 × $0.06 = $120 000 a year.
Advantage. Better reputation and brand image [k]. 40% of its customers say they want less plastic packaging [app], so they may choose Crumb & Co over rivals, increasing its sales [an].
Disadvantage. Higher costs [k]. At 6 cents more per packet, the wrapping adds about $120 000 a year across 2 million packets [app]. If it raises its price, customers may switch to the cheaper own-brand biscuits; if it does not, its profit margin falls [an].

Answer: Advantage: environmentally friendly packaging improves Crumb & Co's reputation [k]; 40% of its customers want less plastic packaging [app], so more of them may choose its biscuits over rivals', increasing sales [an]. Disadvantage: its costs rise [k] by 6 cents a packet, about $120 000 a year on 2 million packets [app], so it must either raise prices and risk losing customers to cheaper own-brand biscuits, or accept a lower profit margin [an].

Example 3. Hilltop Laundry washes sheets and towels for hotels. Its electricity bill is $2 000 a month. Solar panels would cost $45 000 and reduce the bill by $750 a month. Hilltop has $20 000 in cash and would need to borrow the rest. Three of its largest hotel customers have announced that they want their suppliers to reduce their carbon emissions. Do you think Hilltop Laundry should install solar panels? Justify your answer. (8 marks)

Show the working

Eight marks: k2, app2, an2, eval2. One developed advantage, one developed disadvantage, then a decision that adds something new.
Do the numbers first. Yearly saving: $750 × 12 = $9 000. Years for the saving to cover the cost: $45 000 ÷ $9 000 = 5 years. Amount to borrow: $45 000 − $20 000 = $25 000.
Advantage. Renewable energy lowers energy costs [k]. The panels would cut the electricity bill by $750 a month, $9 000 a year [app], so once the panels are paid for, Hilltop's costs are lower and its profit higher [an].
Disadvantage. A high initial cost [k]. The panels cost $45 000 and Hilltop has only $20 000, so it would borrow $25 000 [app]. Interest adds to its costs, so the panels take even longer than 5 years to pay for themselves [an].
Now weigh. On cost alone this is close. The fact that tips it is one the analysis has not used yet: three large hotel customers want suppliers to cut emissions. Losing them would cost far more than the loan.
Write the decision, then the reason that weighs the points, then a condition or extra thought that adds to it — not a repeat.

Answer: Advantage: solar panels use renewable energy, which lowers energy costs [k]; Hilltop's bill would fall by $750 a month, $9 000 a year [app], so after the panels are paid for its costs are lower and profit higher [an]. Disadvantage: the panels have a high initial cost [k] of $45 000, and with only $20 000 in cash Hilltop must borrow $25 000 [app], so interest payments increase its costs and the panels take longer than 5 years to pay for themselves [an]. Justification: I think Hilltop should install the panels, because three of its largest hotel customers want suppliers to cut carbon emissions, and if Hilltop does nothing it risks losing revenue from its biggest customers that it could not easily replace — a bigger threat than a loan that the savings will repay [eval]. The saving then continues for as long as the panels last after the cost is covered, so the decision protects both its sales now and its costs later [eval].

Where people go wrong

Mistake: Treating reusing and recycling as the same thing.

Instead: Reusing uses an item again without breaking it down; recycling processes waste material into new products.

The syllabus lists them as separate methods. A refilled glass bottle is reused; a melted-down plastic bottle is recycled.

Mistake: Calling switching off lights or buying efficient machines 'using renewable energy'.

Instead: That is using fewer resources. Renewable energy is about the source — sun, wind, water — not the amount used.

The two are different methods; mixing them up shows the knowledge point is not understood, so it may not be credited.

Mistake: Giving 'it is good for the environment' as an advantage to the business.

Instead: Link the environmental benefit to what the business gains: a better reputation, so more customers choose it and sales rise.

A question about advantages to the business wants a business consequence. The environment is the reason for the change, not the business's reward.

Mistake: Assuming becoming sustainable always saves money, or always costs money.

Instead: It usually costs money now and can save money later. Say which, and when.

The gap between the up-front cost and the later saving is exactly what an 8-mark answer has to weigh; ignoring either side makes the evaluation one-sided.

Mistake: Writing 'go green' or 'be eco-friendly' as a method.

Instead: Name one of the six methods and say what the business would actually do.

A goal is not a method. The knowledge mark is for the method.

Check yourself

State the six ways the syllabus names for a business to become more sustainable.
Answer
Using renewable energy; using fewer resources / less waste; reusing; recycling; developing environmentally friendly products; using environmentally friendly packaging.
A brewery collects its empty glass bottles, washes them and fills them again. A second brewery sends its empty cans to be melted down into new cans. Which is reusing and which is recycling?
Answer
The first is reusing — the bottles are used again without being broken down. The second is recycling — the cans are processed into new material.
Define renewable energy, and identify two ways a business could use it.
Answer
Energy from sources that do not run out, such as the sun, wind or flowing water. A business could install solar panels or a wind turbine, or buy electricity from a supplier that generates it from renewable sources.
Identify one example of an environmentally friendly product and one example of environmentally friendly packaging.
Answer
Product, e.g. a washing machine designed to use less water and electricity, or clothing made from recycled fibres. Packaging, e.g. a refill pouch, a returnable container, or packaging made from recycled or compostable material.
Explain two advantages to a business of becoming more sustainable, each with its consequence.
Answer
Lower costs in the long run (less energy and waste), so profit can rise; a better reputation, so more customers choose it and sales increase. Also valid: can charge a higher price, so profit margin rises; attracts employees; avoids fines for breaking environmental laws; wins contracts from businesses with environmental targets.
Explain two disadvantages to a business of becoming more sustainable, each with its consequence.
Answer
High initial cost, so a loan may be needed and interest reduces profit; sustainable materials cost more per unit, so the price rises and price-sensitive customers may switch to rivals, or the profit margin falls. Also valid: time and disruption while processes change; savings may take years to cover the cost.
New energy-saving equipment costs $24 000 and saves $400 a month. How long will the saving take to cover the cost, and why might that matter to the decision?
Answer
$400 × 12 = $4 800 a year; $24 000 ÷ $4 800 = 5 years (or $24 000 ÷ $400 = 60 months). It matters because the business pays the whole cost now but gets the saving back only slowly, so it must be able to afford the cost and expect to keep the equipment in use for longer than 5 years.

Exam questions

Try each part first. Open the mark scheme after you have written your answer.

Question 1. Coastline Coffee Roasters roasts coffee beans in a factory and has 55 employees. It sells to cafés and supermarkets. Its roasting ovens run on gas, and its energy bill is $8 000 a month. About 10% of the beans it roasts are burnt and thrown away. Its coffee is sold in foil bags that cannot be recycled, and the empty sacks that raw beans arrive in are thrown away.

(a) Define 'recycling'. 2 marks

Mark scheme

pt2 Award 2 marks for clear understanding, e.g. processing waste / used materials so that they can be made into new products (2). Award 1 mark for some understanding, e.g. using waste again / turning rubbish into something else (1). Do not award examples on their own. Do not award a description of reusing (using an item again without processing it).

(b) Outline two ways Coastline Coffee Roasters could make its production more sustainable. 4 marks

Mark scheme

k1 First way identified, e.g. use renewable energy; use fewer resources / less waste; reuse; recycle; develop environmentally friendly products; use environmentally friendly packaging.
app1 Relevant application, e.g. solar / renewable electricity instead of gas ovens; reduce the 10% of beans that are burnt; reuse the empty sacks; recyclable / compostable bags instead of foil bags that cannot be recycled; $8 000 energy bill; coffee. The reference must make sense in relation to the point.
k1 Second, different way identified (as above).
app1 Relevant application of the second way to Coastline Coffee Roasters (as above). Accept all valid responses.

(c) Explain one advantage and one disadvantage to Coastline Coffee Roasters of reducing the waste in its production. 6 marks

Mark scheme

k1 Advantage identified, e.g. lower costs / fewer resources paid for; improved reputation / brand image; attract customers who prefer sustainable businesses; meet laws / avoid penalties.
app1 Relevant application of the advantage, e.g. 10% of beans burnt and thrown away; empty sacks thrown away; sells to cafés and supermarkets; coffee beans; 55 employees. The reference must make sense in relation to the point.
an1 Relevant development of the advantage, e.g. fewer beans need to be bought for the same output, so cost per bag falls and profit rises / cafés and supermarkets may choose it as a supplier, increasing sales.
k1 Disadvantage identified, e.g. cost of new equipment / better ovens; cost of training employees; time / disruption to production; savings may take time.
app1 Relevant application of the disadvantage, e.g. ovens that burn 10% of beans may need replacing; 55 employees to train; roasting / coffee production.
an1 Relevant development of the disadvantage, e.g. large cash outflow may need a loan, increasing interest costs / production interrupted, so orders for cafés and supermarkets may be late. Accept all valid responses.

Question 2. Bloom Skincare makes face creams and sells them online, mainly to customers aged 18 to 30. It sells 50 000 jars a year at $18 each, in plastic jars. It is considering switching to refillable glass jars, which would raise its packaging cost from $1.20 to $2.00 per jar. A rival brand's sales rose after it launched refill packs. Bloom Skincare is currently using a bank overdraft.

(a) Consider the advantages and disadvantages to Bloom Skincare of switching to refillable glass jars. Do you think it should make the switch? Justify your answer. 8 marks

Mark scheme

k2 Identification of relevant points, up to 2 marks. Advantages, e.g. improved reputation / brand image; attract customers who want sustainable products; could charge a higher price; customer loyalty through refills; keep up with competitors. Disadvantages, e.g. higher cost per unit; lower profit margin or higher price; may lose price-sensitive customers; cost / time of changing suppliers and processes; glass is heavier / more costly to deliver.
app2 Relevant application, up to 2 marks, e.g. packaging cost rises from $1.20 to $2.00 (80 cents more per jar); 50 000 jars a year (about $40 000 extra cost a year); $18 price; customers aged 18 to 30; sells online; rival's sales rose after launching refill packs; bank overdraft; face creams. The reference must make sense in relation to the point.
an2 Relevant development, up to 2 marks, e.g. customers who buy refills return to Bloom rather than trying rivals, increasing repeat sales; without the change it may lose sales to the rival with refill packs; about $40 000 extra cost a year reduces profit if the $18 price is kept; raising price may reduce sales; extra costs could increase its overdraft and interest payments.
eval2 A justified decision about whether Bloom Skincare should switch, up to 2 marks, not repeating earlier points. E.g. yes, because the rival's sales rise shows its customers reward refills, and an extra 80 cents on an $18 product is small enough to pass on without losing many customers / not yet, because while it relies on an overdraft an extra $40 000 a year is risky, so it could first offer refill packs for its existing jars. Justification will depend on the points discussed. Accept all valid responses.

Question 3. Seabreeze Hotel Ltd owns a 60-room beach hotel and employs 35 people. On average, 42 rooms are occupied each night at $110 a room. Its electricity bill is $6 000 a month and its water bill is $3 000 a month. It spends $15 000 a year on small plastic bottles of shampoo and soap for guests, and most are thrown away half-used. In a survey, 58% of its guests said they prefer hotels that protect the environment. A new hotel nearby advertises itself as 'eco-friendly'. Seabreeze has $50 000 to spend on becoming more sustainable.

(a) Explain two benefits to Seabreeze Hotel of becoming more sustainable. 8 marks

Mark scheme

k1 First benefit identified, e.g. lower costs / improved reputation or brand image / attracts customers who care about the environment / helps it compete with rivals / easier to recruit and keep employees. Award 1 mark for each benefit (max. 2).
app1 First benefit applied to Seabreeze Hotel, e.g. $6 000 monthly electricity bill / $3 000 monthly water bill / $15 000 a year on plastic bottles thrown away half-used / 58% of guests prefer hotels that protect the environment / new 'eco-friendly' rival nearby / 60-room beach hotel. The reference must make sense in relation to the benefit.
an2 Up to 2 marks for developing the first benefit, e.g. using fewer resources cuts the $15 000 a year spent on bottles (1), so costs fall and profit rises without raising the $110 room price (1).
k1 Second, different benefit identified (as above). Do not credit a repeat of the first benefit in different words.
app1 Second benefit applied to Seabreeze Hotel (as above).
an2 Up to 2 marks for developing the second benefit, e.g. a reputation for protecting the environment appeals to the 58% of guests who prefer such hotels (1), so fewer of them choose the new eco-friendly rival and more of the 60 rooms are filled, increasing revenue (1). Accept all valid responses.

(b) Consider the following three changes Seabreeze Hotel could make to become more sustainable. Which change should Seabreeze Hotel choose? Justify your answer. Solar panels: cost $48 000 and are expected to cut the electricity bill by 40%. Refillable dispensers: fitting shampoo and soap dispensers in all 60 rooms costs $9 000, and refills cost $6 000 a year instead of the $15 000 spent on bottles. Water recycling: a system costing $35 000 reuses water from showers to flush toilets and water the garden, cutting the water bill by 30%. 12 marks

Mark scheme

Level 3 (9,12 marks): Excellent knowledge and understanding of relevant business concepts using appropriate terminology in context. Detailed discussion of two or more changes. Well-justified recommendation. Candidates discussing all three changes in detail, in context and with a well-justified recommendation including why the alternative changes were rejected should be rewarded with the top marks in the band.
Level 2 (5,8 marks): Good knowledge and understanding of relevant business concepts using appropriate terminology in context. Detailed discussion of at least one change. Judgement with some justification / some evaluation of choice made. Candidates discussing two or more changes in detail and in context should be rewarded with the top marks in the band.
Level 1 (1,4 marks): Limited knowledge and understanding of relevant business concepts in context. Limited ability to discuss the changes with little/no explanation. Simple judgement with limited justification / limited evaluation of choice made. Candidates outlining all three changes in context should be rewarded with the top marks in the band.

Indicative content:

Solar panels, advantage: renewable energy cuts the electricity bill by $2 400 a month ($28 800 a year), the largest saving of the three, so the savings cover the $48 000 cost in 20 months and profit is higher after that.
Solar panels, disadvantage: $48 000 uses almost all of the $50 000, leaving $2 000, so no other change can be made; if the panels produce less electricity than expected, the savings take longer to cover the cost.
Refillable dispensers, advantage: they cost only $9 000 and save $9 000 a year ($15 000 on bottles minus $6 000 on refills), so the cost is covered in 12 months; guests see the dispensers in their rooms every day, which helps win the 58% who prefer hotels that protect the environment.
Refillable dispensers, disadvantage: some guests may see dispensers as less luxurious than their own small bottles, which could harm the image of a beach hotel charging $110 a night; and a small change may not be enough to compete with a rival that advertises itself as eco-friendly.
Water recycling, advantage: reusing shower water means using fewer resources and cuts the water bill by $900 a month ($10 800 a year), and at $35 000 it leaves $15 000 — enough to fit the $9 000 dispensers as well.
Water recycling, disadvantage: the savings take about 39 months to cover the $35 000 cost, the slowest of the three, and guests cannot see water being reused, so it does little to attract the 58% or compete with the eco-friendly rival unless Seabreeze spends money promoting it.
A recommendation could be, e.g.: refillable dispensers, because they pay for themselves in 12 months, are seen by every guest and leave $41 000 for a further change; solar panels are rejected because they use $48 000 of the $50 000 in one go, and water recycling because its savings take over three years to cover the cost and guests do not notice it. Any change can be recommended if it is well justified.

How this is examined

Choosing one of three named sustainable changes for a business in a case study, and saying why the other two lose.: A 12-mark Paper 2 case-study part (b), in the specimen's wording: 'Consider the following three changes … [business] could make… Which change should [business] choose? Justify your answer.' The specimen marks these by levels of response (Level 3 9–12, Level 2 5–8, Level 1 1–4), not by adding up points. For each change, a business advantage and disadvantage — not an environmental one — each tied to a case fact (the cost against the money available, the saving it makes, what customers say they want, what a rival is doing) and followed through to costs, sales or profit. Outlining all three changes with a case fact but no consequence tops out at Level 1 (4). Detailed discussion of at least one change plus a judgement with some justification is Level 2; two or more changes discussed in detail and in context reach the top of Level 2 (8). Level 3 needs detailed discussion of two or more changes and a well-justified recommendation, and the top of Level 3 goes to an answer that discusses all three in detail and in context, then says why each of the other two was rejected for this business — e.g. 'not the biggest saving, because it uses almost all the money available and customers never see it'.
Deciding whether a business should make a particular sustainable change.: The long final part of a data-response question, ending 'Justify your answer', with the cost of the change, the saving, the cash available and what customers or rivals want in the stem. A developed advantage and disadvantage from the stem — 'saves $9 000 a year [app], so costs fall and profit rises [an]'; 'costs $45 000 with only $20 000 in cash [app], so it must borrow and pay interest [an]' — then a decision whose reason weighs the up-front cost against the long-run gain, or uses a fact the analysis has not, such as customers demanding change.
The advantages and disadvantages to a business of becoming more sustainable.: A 6-mark Explain of one advantage and one disadvantage, or two advantages, for a named business. Business consequences, not environmental ones: 'better reputation [k], 40% of its customers want less plastic [app], so more choose it and sales rise [an]'; 'higher cost per unit [k], 6 cents a packet [app], so it must raise prices and risk losing customers or accept a lower profit margin [an]'.
Matching a sustainable method to the problem in the stem.: A 4-mark Outline of two ways a business could make its production more sustainable, with its energy source, waste and packaging described. A named method plus what it would do here: 'use renewable energy [k], solar panels to replace its diesel generators [app]'; 'environmentally friendly packaging [k], returnable glass bottles instead of single-use plastic [app]'. 'Go green' names no method and scores nothing.
Saying precisely what recycling, reusing and renewable energy mean.: A 2-mark Define, or an Identify of two methods of sustainable production. Recycling: 'processing waste materials so they can be made into new products'. Reusing: 'using an item again without processing it'. Renewable energy: 'energy from sources that do not run out, such as solar or wind'. An example on its own does not define the term.

Words to know

Sustainable production: Producing goods and services to meet needs now without damaging the environment or using up resources future generations will need.
Renewable energy: Energy from sources that do not run out, such as the sun, wind and flowing water.
Reusing: Using an item again, for the same or a different purpose, without breaking it down and remaking it.
Recycling: Processing waste materials so that they can be made into new products.
Environmentally friendly product: A product designed to do less harm to the environment during its life, for example using less energy or being recyclable.
Environmentally friendly packaging: Packaging that does less harm to the environment: less of it, or made to be recycled, reused or composted.
Brand image: The way customers see and feel about a business or its products.

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