Samacheer Kalvi 11th Commerce Guide Chapter 16 Emerging Service Business in India

Tamilnadu State Board New Syllabus Samacheer Kalvi 11th Commerce Guide Pdf Chapter 16 Emerging Service Business in India Text Book Back Questions and Answers, Notes

Tamilnadu Samacheer Kalvi 11th Commerce Solutions Chapter 16 Emerging Service Business in India

11th Commerce Guide Emerging Service Business in India Text Book Back Questions and Answers

I. Choose the Correct Answer

Question 1.
A continuing relationship which provides a licence privileges to do business and provides training, merchandising for a consideration is called ………..
a) Franchising
b) Factoring
c) Supply Chain Management
d) Exchange
Answer:
a) Franchising

Question 2.
A condition where a factor agrees to provide complete set of services like financing, debt collection, and consultancy is called …………….
a) Maturity factoring
b) National Factoring
c) Full service Factoring
d) Recourse Factoring
Answer:
c) Full service Factoring

Question 3.
Buying and selling of goods through electronic network is known as ………
a) E-commerce
b) internet
c) Website
d) Trade
Answer:
a) E-commerce

Question 4.
An organization carrying out activities to move goods from producer to consumer is …………….
a) Transport
b) Logistics
c) Channels
d) Marketing
Answer:
a) Transport

Question 5.
The role of government in logistics management is through ……………….
a) Legislations
b) Governance
c) Transport
d) Distribution
Answer:
d) Distribution

Question 6.
The main benefit of Logistics is ……………….
a) Productivity
b) Cost Minimisation
c) Profitability
d) Storage
Answer:
b) Cost Minimisation

Question 7.
What aims for an effective management response over the longer run ……………………
a) Logistics
b) Supply Chain Management
c) Demand
d) Supply
Answer:
a) Logistics

Question 8.
The model that identifies alternatives, criteria for decision making and analyse alternatives to arrive at the best choice is
a) Routing Model
b) Scheduling Model
c) Inventory Model
d)Altemative Analysis
Answer:
b) Scheduling Model

Question 9.
A company under outsourcing tránsfers activities which are ……………….
a) Core
b) Non-core
c) Business
d) Non business
Answer:
b) Non-core

Question 10.
Business units can reduce expenditure by outsourcing front office work like ……………
a) Paper work
b) File work
c) Billing
d) Manufacturing
Answer:
b) File work

Question 11.
Outsourcing job is given to developing countries specifically for ……………….
a) Cheap labour
b) Land
c) Capital
d) Factors
Answer:
a) Cheap labour

Question 12.
Outsourcing is carried out for the benefit of ……….
a) Global village
b) Transport
c) Factor
d) Time and money
Answer:
d) Time and money

II. Very Short Answer Questions

Question 1.
Who is a franchisee?
Answer:
The individual who acquires the right to operate the business or use the trademark of the seller is known as a tire franchisee.

Question 2.
State two disadvantages of franchising?
Answer:

Reduced risk: The franchisee will acquire the right of running an already established business, thus eliminating the risk of starting a new business.
Operational support: The franchisee is provided assistance not only in obtaining finance but also in deciding the business location, decor/design, staff training,’ and handling day-to-day operations.

Question 3.
Who is a factor?
Answer:
The factor is an agent who buys the accounts receivables (Debtors and Bills Receivables) of a firm and provides finance to a firm to meet its working capital requirements.

Question 4.
Define outsourcing.
Answer:
Outsourcing is a business practice used by companies to reduce costs or improve efficiency by shifting tasks, operations, jobs, or processes to an external contracted third party for a significant period of time.

Question 5.
What is the need for outsourcing?
Answer:

To focus on a key function
The benefit of specialization/efficiency
Cost-cutting
Economic growth and development
Increasing profit
Catering to the dynamic demand

Question 6.
State the importance of BPO.
Answer:
BPO refers to outsourcing in all fields. It usually administers and manages a particular commercial enterprise process for the employer. It is an important component of the business strategy of major organizations worldwide. It helps in cost reduction, productivity growth, and innovative capabilities.

Question 7.
What are the benefits of KPO?
Answer:
In short, KPO firms get knowledge related, information related, work done from the outside firm and it involves high-value work carried a highly skilled staff.

Question 8.
Define Logistics.
Answer:
The logical extension of transportation and related areas to achieve an efficient and effective goods distribution system is known as logistics. According to the council of supply chain management professionals, “Logistics is the process of planning, implementing and controlling procedures for the efficient and effective transportation of the products.

Question 9.
What is the need for Logistics?
Answer:
Logistics Management is defined as ‘Design and operation of the physical, managerial, and informational systems needed to allow goods to overcome time and space (from the producer to the consumer)’.

Question 10.
Write about the importance of Logistics.
Answer:

It is a most basic form
It has the control and supervision of “the movement of the goods.
It helps in improving customer service.
It increases the revenue
It helps in reducing overall transportation costs.
It helps in improving the operating cost structure.

Question 11.
What are the types of Logistics Applications?
Answer:
Logistics Management can be classified on the basis of applications from various dimensions in the process of examining and evaluating alternatives. They are

Decision-wise
Inbound logistics
Actor-wise
Outbound logistics

Question 12.
What do you mean by e-commerce?
Answer:
E-commerce or Electronic commerce is the buying and selling of goods and services through electronic networks like the internet.

III. Short Answer Questions

Question 1.
What are the types of franchising?
Answer:

Product/trade name franchising: In this type, the franchisee exclusively deals with a manufacture’s product, for example, Kidzee, French Loaf outlets.
Business format franchising: When a franchisor awards rights covering all business aspects as a complete business package to the franchisee it is called business format franchising, for example, McDonald’s, Pizza Hut.

Question 2.
List the steps in the factoring process.
Answer:
The following are the process in factoring:
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The firm enters into a factoring arrangement with a factor, which is generally a financial institution, for invoice purchasing.
Whenever goods are sold on a credit basis, an invoice is raised and a copy of the same is sent to the factor.

The debt amount due to the firm is transferred to the factor through the assignment and the same is intimated to the customer. On the due date, the amount is collected by the factor from the customer. After retaining the service fees, the remaining amount is sent to the firm by the factor.

Question 3.
Describe the benefits of Logistics.
Answer:
Generally, good transportation, storage, handling, and information infrastructure help inefficient logistics management. All firms are viewed as a collection of primary and secondary activities.

Question 4.
Explain the points of differences between Logistics and Supply Chain Management.
Answer:

Logistics	Supply Chain Management
Logistics management deals with the efficient management of the static gap between demand and supply	Supply Chain Management tries to identify the dynamic nature of the value creation itself such as responsiveness, quality, and design.
It aims for an effective management response over the longer run	It focuses on profit maximization rather than cost minimization.
Its activities are supply-driven	Its activities are demand-driven.

Question 5.
What is the impact of e-commerce on buyers?
Answer:

Buyers could have global access to information about a variety of products and services available in the market.
They could buy the products/services round the clock from anywhere in the world.
The prices of products bought through e-commerce tend to be relatively lower than those purchased physically in the conventional shops due to offers, discounts, etc.

IV. Long Answer Questions

Question 1.
Enumerate the characteristics of franchising.
Answer:

A franchise relationship is based on an agreement which lays down the terms and conditions of this relationship.
The term of the franchise may be for 5 years or more. The franchise agreement may be renewed with the mutual consent of the parties.
The franchisee gives an undertaking not to carry any other competing business during the term of the franchise, and the franchiser gives an undertaking not to terminate the franchise agreement before its expiry except under situations that may justify the termination of the franchise agreement.
The franchisee agrees to pay specified royalty to the franchiser, as per the terms of the franchise agreement.
Franchise means selling the same product and maintaining a similar type of shop decor (i.e. style of interior decoration) for which the franchiser provides assistance to the franchisee in organizing, merchandising, and management.

Question 2.
Elucidate the features of factoring.
Answer:
Meaning: Factoring implies a financial arrangement between the factor and client, in which the firm (client) gets advances in return for receivables, from a financial institution (factor).
Features of Factoring:

Maintenance of book-debts: A factor takes the responsibility of maintaining the accounts of debtors of a business institution.
Credit coverage: The factor accepts the risk burden of loss of bad debts leaving the seller to concentrate on his core business.
Cash advances: Around eighty percent of the total amount of accounts receivables is paid as advance cash to the client.
Collection service: Issuing reminders, receiving part-payments, collecting cheques form part of the factoring service.
Advice to clients: From the past history of debtors, the factor is able to provide advice regarding the creditworthiness of customers, perception of customers about the products of the client, etc.

Question 3.
Describe the benefits of Outsourcing.
Answer:

Focusing on Core Activities: Companies can focus on their core competence, a few areas, where the company has a distinct capability. The rest of the activities (non – core) can be outsourced to outside agencies.
To Fillip Economic Development: Outsourcing stimulates entrepreneurship, encourages employment opportunities, expands exports, enables tremendous growth of the economy.
Encourages Employment Opportunities: Companies that are outsourcing their non-core activities provide chances for other small business units to take up the activities. This paves way for more job opportunities and new employment avenues.
Reduction in Investment: Companies through outsourcing avails the services of outsiders which in turn reduces the investment requirements. The amount so available can be utilized productively and this increases the profits.
Quest for Excellence: Outsourcing enables the firms to pursue excellence in two ways namely excelling themselves in the activities they do and excel outsiders by extending their capabilities through contracting out.

Question 4.
Explain the points of differences between BPO and KPO?
Answer:
Business Process Outsourcing:
BPO refers to the outsourcing of non-primary activities of the organization to an external organization to minimize cost and increase efficiency It provides services related to marketing, human resources, customer support, and technical support, etc.

Knowledge Process Outsourcing:
KPO is another kind of outsourcing whereby, functions related to knowledge and information are outsourced to third-party service providers It is a process that involves knowledge-related work handed over to the outside party. The fine line difference between BPO and KPO is explained in the following table.

Basis For Comparison	BPO	KPO
Based on	Rules	Judgment
Degree of complexity	Less complex	High complex
Requirement	Process Expertise	Knowledge Expertise
Relies on	Cost arbitrage	Knowledge arbitrage
Driving force	Volume driven	Insights driven
Collaboration and Coordination	Low	Comparatively high
Talent required in employees	Good communication skills	Professionally qualified workers are required
Focus on	Low-level process	High-level process

Question 5.
Write a note on e-commerce models.
Answer:
1. Business to customers (B2C):
This is the fastest-growing segment in e-commerce spare. Under this model, business concern sells directly to consumers.

2. Business to Business (B2B):
Under the model, business concerns transact with one another through the internet. For instance, Snapdeal, Flipkart, Alibaba, Indiamart, Tradelndia.com, etc.

3. Consumer to consumer (C2C):
Under this model, customers sell directly to other customers through online classified advertisement or through auction or through mobile or through market places. For example, Indian ventures in C2C are Kraftly App (buying and selling anythings) which deals in handmade products of a wide range. Onceagainstore.com is a website that buys pre-owned women’s fashion products. Other players are Quikr, OLX, ebay, etc.

4. Customer to Business (C2B):
This model is reverse to the auction model. Products like automobiles, electronic items furniture, and similar product are traded by customers through websites. Naukri.com and Monster.com are examples of Indian Companies operating in this domain.

5. Business to Government (B2G):
This model envisages selling products and services by the business consumers to Government organizations. For instance, TCS operates the passport application process for the Government of India as a part of offline process.

11th Commerce Guide Emerging Service Business in India Additional Important Questions and Answers

Choose the Correct Answer:

Question 1.
There are …………….. parties to a franchising agreement.
(a) two
(b) Three
(c) Four
(d) Five
Answer:
(a) two

Question 2.
The Factoring Regulation act was established in the year …………..
a) 2014
b) 2013
c) 2016
d) 2011
Answer:
d) 2011

Question 3.
Factoring means ……………..
(a) to make or do
(b) to work
(c) for credit
(d) for debit
Answer:
(a) to make or do

Question 4.
‘Facere’ means
a) to make or do
b) to produce
c) to assemble
d) to receive
Answer:
a) to make or do

II. Very Short Answer Questions:

Question 1.
What is E-Business?
Answer:
E-Business is a broader term which includes an internal and external transaction of an organization across the internet.

Question 2.
What do you mean by Maturity factoring?
Answer:
The factor agrees to finance the firm only after collecting the amount on maturity from debtors.

Question 3.
Mention any two advantages of franchising.
Answer:

Reduces risk
Business expansion.

III. Short Answers Questions:

Question 1.
What is the impact of e-commerce on vendors?
Answer:

Vendors could have wider access to customers across the globe.
This helps minimize the cost of operating business due to direct distribution of goods to end consumers thanks to the minimum invention of intermediaries.
The vendor could interact with multiple buyers and sellers.

Question 2.
What are the elements of Logistics Cost?
Answer:
The important elements of logistics cost are Product Inventory at source, Pipeline Inventory, Product Inventory at warehouses and dealers, Transit Losses/Insurance, Storage Losses/ Insurance, Handling and Warehouse operations, Packaging, Transportation, Customer’s Shopping.

Question 3.
Explain Core and Non-Core activities:
Answer:
A core activity involves experience, expertise, efficiency, and even investment in the field of specialization. Non- Core activities can be outsourced to outsiders who are specialists in their area of operation.

Question 4.
What is the impact of E-Commerce on Vendors?
Answer:

Vendors could have wider access to customers across the globe.
This helps to minimize the cost of operating
business due to direct distribution of goods to end consumers thanks to the minimum invention of intermediaries.
The vendor could interact with multiple buyers and sellers.
Business concerns could orient marketing efforts towards targeted customers.

IV. Long Answer Questions:

Question 1.
Briefly explain the advantages of Franchising:
Answer:
Reduced risk:
The franchisee will acquire the right of running an already established business, thus eliminating the risk of starting a new business.

Business expansion:
Franchising provides an opportunity to expand business at regional, national and global levels without incurring additional expenditure. Thus rapid growth of the franchisor’s business is facilitated.

Cost of advertising:
The cost of advertising for the franchisor will be reduced since this cost will be shared by the franchisee. Moreover, it enables the franchisor to reap the benefits of increased visibility across regional and national boundaries.

Operational support:
The franchisee is provided assistance in not only obtaining finance, but also in deciding the business location, decor /design, staff training, and handling day-to-day operations.

Question 2.
What are the disadvantages of franchising?
Answer:
Franchising fees:
The initial franchising fee and the subsequent renewal fees can be very high in the case of successful businesses. From the franchisee’s point of view, this may be a deterrent.

Fixed royalty payment:
The franchisee has to make payment of royalty to the franchiser on a regular basis. This considerably reduces the income of the franchisee.

The danger of image tarnishing:
If the franchisee does not maintain standards of quality and service; there is a danger that the goodwill and image of the reputed franchiser will be adversely affected.

Lack of freedom:
The franchisee does not have the freedom to run his business in an independent manner. He has to abide by the management and operational policies of the franchiser, Which may serve as a deterrent whether suitable to him or not.

Limitation on a range of products:
The franchisee cannot introduce new product lines into the business, except those permitted by the franchiser. This may mean loss of business to franchisee amidst demands based on local conditions.

Question 3.
Compare Factoring with Forfeiting:
Answer:

Characteristics	Factoring	Forfeiting
Basis of financing	Financing is dependent on the exporter’s credit standing	Financing is dependent on the availing bank’s financial standing
Cost	Cost is borne by the seller	Cost is borne by the overseas buyer
Suitability	For the transaction of the short-term maturity period	For transactions of the medium-term maturity period
Extend of financing	Only a certain percent of receivables factored is advanced	Full finance is available
Risk	Risk can be transferred to the seller.	All risks are borne by the festering

Question 4.
Explain the features of Outsourcing:
Answer:
Transferring Non-Core Activities to Outsiders:
Companies can outsource those non-core activities functions like maintenance, housekeeping, gardening, etc. to outsiders, depending upon the nature of the business and the activities are identified as core or non-core activities.

Outsourcing Involves Contracting:
As the companies start outsourcing their activities focusing on their main business, the outside agencies enter into an agreement with the company to perform the routine activities on a contractual basis.

Operational Efficiency through Outsourcing:
Companies specialize in their business system as the time available at their disposal can be utilized for the core activities leading to efficiency improving the quality of the product.

Improved Customers Satisfaction:
The number of customers can be increased through timely delivery and high-quality services. Outsourcing helps in customer satisfaction and results in repetitive purchases of the same product.

Cost Reduction:
The only way to survive and earn a profit is through global competitiveness by fixing a competitive price. Division of labour and specialization along with good quality product reduces the cost. For example outsourcing of research and development, manufacturing, software development, etc.