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Transcription of this question: 4.Michelle Kaufmann Designs (MKD)Michelle Kaufmann Designs (MKD) in San Francisco, USA, is a leader in designing andmanufacturing modular* houses that are both beautiful and environmentally friendly Customerschoose one Of six basic MKD models and then further customize the number Of bedrooms,bathrooms, and the final details. Customers can also decide whether to have solar panels.[Source: http://wuwmkd-arc_com.•homes’mksolaire, I S February 2009]The modules are built in four to six weeks using job production methods in the firm’s factory.TO be more environmentally friendly, the factory is located near suppliers Of the buildingmaterials. Michelle Kaufmann, owner and founder Of MKD, insists that all suppliers operate in anenvironmentally friendly manner. Lorries deliver the modules to the location where the house willbe built. It then takes another six weeks for the work to be completed.The main benefits of buying a MKD house compared to an identical traditionally built house are:• it takes a third less time to construct• it is of better quality• it requires less petrol (gasoline) to transport labour and materials to and from a construction site.These benefits fit MKD vision statement: “Making green architecture affordable to everyone”The firm’s mission statement includes the firm’s five eco-principles: smart design, eco-materials,energy efficiency, water conservation and healthy environment. Michelle hopes to build a brandaround environmental friendliness and elegant design. She is strengthening her brand by alsoselling books, T-shirts, bags and furniture, all bearing the MKD logo.MKD faces several challenges:Americans have negative perceptions Of modular housesenvironmentally friendly houses are more expensive than Other housesthere is a severe economic downturn and the demand for new houses is falling rapidlyprice sensitive customers are requesting the use Of non-environmentally friendly materials to keepprices down• it has numerous competitors in the market for environmentally friendly houses.Although Michelle differentiates her business by being the only one in San Francisco offeringmodular houses, she has higher fixed costs to maintain the factory.[Source adapted from http:.’/wawprueb_conVreIeasesprefabgreeWmkd-arc,/pnveb2102184 _htm, 18 February 20091(a)(b)(c)(d)Define the term job pmduction.(i) With reference to MKD, distinguish between fixed costs andvariable costs.(ii) Explain one reason why it is important for MKD to strengthen its brand _With reference to MKD, analysevision statement.Discuss whether Michelle shouldmaterials to keep prices down”thestartrole Of a mission statement and ausing ‘ ‘non-environmentally friendly[2 marks][4 marks][2 marks][5 marks][7 marks]

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