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Cambridge IGCSE
BUSINESS STUDIES 0450/22
Paper 2 Case Study May/June 2021
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Tandeep Toys (TT)
Tandeep is planning to set up a toy shop in country Z. He worked for a toy manufacturer for 10
years. Tandeep thinks he has enough knowledge of toys and customer needs to start his own
business.
Tandeep plans to sell a large range of toys which will include products for all ages of children from
babies through to teenagers. The toys will all be well known brands and aimed at higher income
groups. The most popular product is likely to be toy cars. Tandeep also plans to sell a range of
accessories for babies such as pushchairs (strollers) which he may have to import. Making sure
there is inventory to always meet demand is very important to the success of TT.
Tandeep has a loan of $40 000 from his family to invest in the business. He wants to set up as a
private limited company. He knows that he will need working capital to run his business. He may
offer credit to some customers for more expensive items such as nursery furniture. Tandeep knows
that there are several legal controls to protect consumers.
Tandeep has been looking at locations for his toy shop. He has identified two locations to choose
between as outlined in Appendix 1.
Tandeep will need to recruit several employees to work in his shop. He plans to recruit a shop
manager and 5 sales assistants. Tandeep will carry out all the administration. As part of the
recruitment process he will need to produce job descriptions, job specifications and then shortlist
applicants.
Appendix 1
Two possible locations for Tandeep’s shop
Location A
The shop is located in a popular shopping mall in the city centre. Parking is expensive and the rent
is high. The mall is open from 8.00 to 22.00 every day. There are several other toy shops located
in the mall as well as banks, a cinema and children’s playground.
Location B
The shop is located on a busy street in a local town. There are many other shops and a street
market in the area. Local people frequently visit the shopping area to buy food. Parking is always
available and is free. The rent is low. There are no other toy shops in the town.
Appendix 2
Information on channels of distribution for toy cars
Wholesaler in country Z Manufacturer in country Z
Unit cost of toy car $15 $5
Delivery time for orders 1 day 4 weeks
Minimum quantity that must be ordered 10 units 1000 units
Trade credit 1 month 3 months
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Appendix 3
Cash-flow forecast for the first 6 months of trading for TT ($)
July Aug Sept Oct Nov Dec
Cash sales 600 1 000 1000 1 000 2 000 2 000
Rent and
500 500 500 500 500 500
wages
Purchases of
300 100 100 100 100 100
inventory
Shop
40 000
equipment
Net flow (40 200) 400 400 400 1 400 1 400
Opening
40 000 (200) 200 600 1000 2 400
balance
Closing
(200) 200 600 1 000 2 400 3 800
balance
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