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Edexcel A level economics and their incorrect mark scheme but refusal to change it.

Discussion in 'Business studies' started by jfarrier, Jul 16, 2014.

  1. danlee

    danlee New commenter

    The milk companay COULD also be a large investment bank in which case it is diversification. You are not advising your pupils to use the information given. This is very simple - milk company = supplier and milk product manufacturer = producer - the milk company is clearly 1 step behind the production process than the food manufacturer and so it cannot even be argued that this is not backward vertical.

    Perhaps as an exam tip next year you might inform you pupils that they should base their answers on the evidence given and avoid wild and unwarrented assumptions.
     
  2. danlee

    danlee New commenter

    It is staggering that somebody with your experience does not accept this point of view.
     
  3. I accept that point of view but it is staggering you do not accept there is an alternative. For your answer to be correct one has to ASSUME PWM sells milk to the producer and not to the retailer or consumer. That assumption can't be made on the evidence.
     
  4. doomzebra

    doomzebra Occasional commenter

    No you don't - whoever PWM sells milk to currently is irrelevant - all that needs to be known is what you are told - that PW sells milk and DC uses milk - it is this simple fact that makes the integration backward vertical.
     
  5. 'PW sells milk and DC uses milk' so DC can use PW as a distributor.
     
  6. doomzebra

    doomzebra Occasional commenter

    If I were you I would have a look at some definitions of backward vertical integration used in Edexcel-endorsed books and revision guides such as Edexcel AS Economics Units 1,2 & 3 Digital Textbook by Geoff Riley

    "Backward vertical integration occurs when a firm merges with another business at a previous stage of the supply chain"

    Producing milk is unequivocally at an earlier stage of the supply chain than producing dairy products out of milk.
     
  7. doomzebra

    doomzebra Occasional commenter

    You are continuing to make unsupported assumptions about PW's customer base - assumptions which simply don't matter anyway - by producing milk PW are unarguably at an earlier stage in DC's supply chain. THAT is all that matters in terms of this question.
     
  8. doomzebra

    doomzebra Occasional commenter

    The fact that DC can (possibly) use PW as a distributor is no more relevant than saying DC can (possibly) convert DC's dairy plant into a skateboard park (which you would presumeably then use as an argument that the acquisition is diversification).

    Occam's Razor should be the guiding principle in short-answer questions.
     
  9. 'Producing milk is unequivocally at an earlier stage of the supply chain than producing dairy products out of milk.'

    But PWM does not produce milk it sells milk. That is all we know. Therefore it is of utmost importance who it sells it to. If it's the producer, then it's backward, if it's the final consumer then it's forward.
     
  10. doomzebra

    doomzebra Occasional commenter

    OK - the producers of milk are the cows. This distinction is not important.

    DC buys milk from someone who sells milk. Any organisation that sells milk (such as PWM) is therefore at an earlier stage in the industry's production process than DC, even if PWM produce and sell their own milk or just sell on milk from other producers.

    In the absence of any other information, there is only one possible answer - backward vertical integration.

    The only way any other answer is correct is if you shoe-horn into your analysis assumptions about DC and PWM - this would perhaps be a valid exercise in a 12-mark longer written answer about how PWM would fit into DC's operations, but in a simple multiple-choice exercise it is folly to make these assumptions and bloody awful examination technique

    Once again, look to the principle of numquam ponenda est pluralitas sine necessitate
     
  11. 'DC buys milk from someone who sells milk.'

    You are making an assumption here. There is no evidence that DC buys milk. DC 'uses' milk in production. It could use its own milk. We don't know. We have to assume. But there is nothing wrong in making such an assumption, in the same way as there is nothing wrong with assuming PWM is a distributor, or a retail outlet and has been bought to sell DC's milk.

    Your previous explanation also required an assumption. 'By producing milk PW are unarguably at an earlier stage in DC's supply chain' ie you made the assumption PW are producers. Again, nothing wrong with this. Assumptions are required because of the lack of information in the question.

    The question is 'This takeover could lead to advantages of'

    The answer could be backward if we assume DC buys milk from producers like PWM.

    Or it could be forward if we assume DC sells milk to distributors like PWM.

    The question is not: This takeover is an example of which of the following types of integration, and when determining your answer consider the number of assumptions required and then choose the answer with the least number of assumptions.

    As the examiner Cjwitts explained in an earlier post: 'This seems too complex, nuanced an argument for a question which should take up only 4-5 minutes.

    If Edexcel are testing knowledge of key terms and application of theory, surely C is an acceptable answer if argued logically?'

    A multiple choice question should have one clear answer and not be reduced to Ockham's razor principle. The requirement to invoke such a principle suggests in itself there is more than one correct answer, which is my point, and should be taken into account by the mark scheme.

    The fault with the paper's question is the lack of information about PWM. Simply stating it 'sells' is insufficient, after all, all firms sell.
     
  12. doomzebra

    doomzebra Occasional commenter

    Producing and providing are (in this context) synonymous - no assumption is required

    DC is described as a food producer, not a milk producer - no assumption is required

    Any other answer requires you to make unnecessary assumptions.

    However, since you are so sure you are right it is pointless carrying on this discussion with you.
     

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