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Transcription of this question: 4.Magda’s flower businessMagda Fiori has always loved flowers. When 18 years Old, she left school and worked as anassistant florist. Then, three years later, she set up her own flower business. She is a sole trader; thistype Of organization is common for florists. She employs two part-time assistants: one who deliversflowers to customers in the morning, and one who helps her in the shop at busy times, in the lateafternoon. Both assistants work four hours a day, six days a week.After a difficult start, Magda’s business has been very successful for the last two years. Her customersare loyal, even if they cannot always find the flowers they want. Customers like her creativity,her sense of humour and the good advice that she gives.Magda would now like to expand her business. She could join an international franchisesuch as Interflora. She likes the idea, but she knows that her stock control methods wouldhave to change radically. She would need to adopt a “just-in-case” method Of stock control,which Interflora would require to ensure that customers always find the flowers they want.Magda also fears that she cannot afford the necessary investment for storage and marketing.She wonders whether a bank will loan her money. Magda’s small business has only one sourceOf revenue.Magda has also considered three methods Of external growth:a joint venture with a local wedding organizer• a strategic alliance with a garden centrea merger with another florist.(a)(b)(c)(d)(e)Identify two variable costs for Magda’s flower business.Explain the meaning Of the sentence: “Magda’s small business has only onesource Of revenue”.Using Magda’s flower business, distinguish between “just-in-case” and”just-in-time” methods Of stock control.Analyse the advantages and disadvantages for Magda of joining an internationalfranchise such as Interflora.Recommend to Magda one Of the three methods Of external growth that shehas considered.[2 marks][2 marks][4 marks][5 marks][7 marks]

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