T.13 Contribution questions for IB Business Management

Tasman Rail Freight

[1] Tasman Rail Freight (TRF) is a privately held company that carries containers, timber and dairy products by rail between the ports and the main processing centres of New Zealand’s North Island. TRF employs 210 locomotive drivers, almost all of whom belong to the Rail Workers’ Union (RWU).

[2] Each year TRF and the RWU negotiate drivers’ pay. This year the talks have broken down. The RWU is claiming a 6 % pay rise, pointing to inflation of 4.1 % and to TRF’s record profit last year. TRF has offered 2.5 %. At the same time, TRF wants to introduce driver-only operation on long-haul trains, removing the second crew member from the cab, and new 12-hour rosters. The RWU says that driver-only operation is unsafe on remote mountain routes and that the new rosters will cause fatigue.

[3] After three meetings without agreement, the RWU announced a 4-day strike. TRF’s chief executive, Tama Paewai, says the strike would cancel 80 % of services. Several dairy exporters have warned that they will move their freight to road hauliers if services are disrupted. The RWU has offered to call off the strike if TRF agrees to refer both the pay claim and driver-only operation to binding arbitration by an independent arbitrator.

Table 1: TRF revenue and costs on an average operating day (NZ$)

Table 2: Drivers’ pay

Mirada Clara (MC)

Read the resources and answer the questions that follow.

Mirada Clara (MC) is a social enterprise in Tegucigalpa, Honduras, founded in 2016 by Dr Óscar Zelaya, an optometrist. Many Hondurans who need glasses never get them: in rural areas there are almost no eye specialists. MC runs two optician shops in the city, which sell fashionable frames, and four mobile clinics – vans that visit villages to test eyes and sell simple, durable glasses at a low price. Its lab makes all the glasses. Since 2021, a foreign government aid agency has paid MC to give free glasses to schoolchildren who need them, but this funding ends in 2027.

Image: a small girl in a school uniform looks up through new round red glasses, her face lit by surprise, while an optometrist in a white coat kneels beside her outside a van painted with an eye chart. Slogan: “Mirada Clara – see your future”.

Resource 1 – News article from *Honduras Negocios Hoy*

Clear sight for poor children – but who will pay?

Studies show that children who cannot see the board fall behind at school, and adults with poor eyesight lose work. MC says it has tested 140 000 people. But with the aid programme ending, it must find new income. A large national optical chain has also opened shops near MC’s city stores and is offering designer frames at discount prices.

Table 1: MC’s sales and costs, 2025

HNL = Honduran lempiras. Fixed costs in 2025: city shops HNL 2.6 million; mobile clinics HNL 3.4 million; lab and administration HNL 1.1 million. The aid agency also gave MC a grant of HNL 0.8 million for the mobile clinics.

Resource 2 – Social media posts from Rosa, a farmer in Olancho

For ten years I could not thread a needle or read my children’s school reports. The Mirada Clara van came to our village and for 350 lempiras I can see again. God bless them. [1/2]

My neighbour wanted glasses too but did not have the money that day. The van only comes twice a year. Could they let us pay a little each month? [2/2]

Resource 3 – Internal email from Dr Óscar Zelaya to MC’s managers

From: Dr Óscar Zelaya, Founder and Director

To: Managers

Subject: Pricing after 2027

Without the aid agency we lose the HNL 300 per school pair and the HNL 0.8 million grant. Proposals so far:

1. Raise the price of basic glasses from HNL 350 to HNL 450. Our survey (attached) suggests that we would sell about 30 % fewer pairs.

2. “Buy one, give one” in the city shops: add HNL 300 to the price of each designer pair and give a free pair to a schoolchild for each one sold.

3. Ask municipalities to pay HNL 250 for each pair of school glasses.

4. Cut designer prices to compete with the national chain.

I want a pricing plan that keeps us open without pricing out the people we exist for.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Survey of mobile clinic patients (300 replies)

Resource 5 – Prices of competitors in Tegucigalpa

Resource 6 – Interview with a city-shop customer

“I buy my glasses at Mirada Clara because I know my money helps kids in the countryside – there is a photo wall of the children in the shop. If they told me exactly that my pair paid for a child’s pair, I would happily pay a bit more. My office colleagues think the chain is cheaper, though.”

Kaskade is a mineral water bottler in Tyrol, Austria. It can produce 500 000 bottles a month but currently sells 380 000 bottles a month to supermarkets at €0.60 each. A hotel chain has offered to buy an extra 100 000 bottles a month, with its own label, at €0.42 per bottle for one year.

Table 1: Kaskade’s monthly costs

Dasi Banchan (DB)

Read the resources and answer the questions that follow.

Dasi Banchan (DB) is a certified social enterprise in Gwangmyeong, near Seoul, South Korea, founded in 2017 by Kim Soo-jin, a social worker. Dasi means “again”. DB employs 38 people, most of them North Korean defectors and women over 60, who find it hard to get jobs. They make banchan – the small side dishes served with every Korean meal – and kimchi, which DB delivers in weekly subscription boxes to households and supplies to school canteens. DB prepares everything in its own kitchen, from washing and salting whole cabbages to packing.

Image: an open delivery box with six small glass containers of colourful side dishes – spinach, bean sprouts, braised potatoes, cucumber kimchi, anchovies and cabbage kimchi – and a handwritten card signed “Mrs Park”. Logo: “Dasi Banchan – a fresh start at every meal”.

Resource 1 – News article from *Korea Social Economy Times*

Side-dish kitchen serves up second chances

Ready-made banchan are now bought by millions of busy Korean households, and big food companies dominate the market with factory-made products. DB competes on taste and its story. Rising cabbage prices and strict food-safety inspections have squeezed margins across the industry. A national convenience-store chain is looking for “social value” kimchi to sell in its stores.

Table 1: DB production, 2025

Resource 2 – Social media posts from a subscriber

Our DB box is the best part of Monday. Mrs Park’s braised potatoes taste exactly like my late mother’s. Knowing the money helps defectors start a new life makes it even better. [1/2]

Last month two dishes were sold out and replaced with “substitutes”, and the box came a day late. Hope they’re not getting too big for their kitchen! [2/2]

Resource 3 – Internal email from Lee Jun-ho, operations manager, to Kim Soo-jin

From: Lee Jun-ho, Operations Manager

To: Kim Soo-jin, CEO

Subject: Capacity, waste and the cabbage question

Some thoughts before the board meeting:

1. Make or buy salted cabbage. We salt about 180 000 kg of cabbage a year. Doing it ourselves costs KRW 72 million a year in fixed costs (six preparation workers and equipment) plus KRW 1 900 per kg. A factory would supply ready-salted cabbage at KRW 2 400 per kg. Buying would free floor space but the six preparation jobs would go.

2. Convenience-store kimchi. The chain would take kimchi packs equal to about 12 000 boxes a month, all year round, at a lower margin than subscriptions.

3. Waste. We buy vegetables in large weekly loads in case prices rise; 9 % is thrown away. A farmers’ co-operative offers daily deliveries, but at prices about 4 % higher.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Interview with Park Mi-young, aged 67, a DB cook

“I came from the North with nothing. Here I am the expert – the young ones ask me how to salt cabbage properly. Salting is hard work, but it is the heart of kimchi; factory cabbage is too soft. If we stop doing it, what will people like me do? We can work faster, though, if the kitchen is better organized. We walk back and forth all day.”

Resource 5 – Survey of DB subscribers (430 replies)

Resource 6 – Benchmark data from a food-industry consultant

Imprenta Ledesma is a commercial printing firm in Valencia, Spain. Its presses are busy from September to December printing catalogues and calendars, but stand idle about 40 % of the time from January to August. The owner, Rafael Ledesma, is considering accepting off-season print jobs at prices that cover the cost of paper, ink and press operators’ extra hours but not a share of rent, machine leases and administration.

Examine the use of contribution pricing for Imprenta Ledesma’s off-season work.

Kurundu Collective (KC)

Read the resources and answer the questions that follow.

Kurundu Collective (KC) is a social enterprise near Ahangama in southern Sri Lanka, founded in 2013 by Nirmala Wickramasinghe. Kurundu is the Sinhala word for cinnamon. It employs 260 cinnamon peelers – skilled workers who strip the thin inner bark from cinnamon shoots by hand and roll it into long quills – and buys bark from 900 smallholder growers at fair prices. Sri Lanka is famous for “true” Ceylon cinnamon, but peeling is hard work and few young people want to learn it; the average age of KC’s peelers is 54. KC sells four products.

Image: a peeler sitting cross-legged on a mat, his hands rolling a long, pale-gold cinnamon quill; behind him are bundles of quills drying on racks and a small glass bottle of amber oil labelled “Kurundu – true Ceylon cinnamon, peeled by hand”.

Resource 1 – News article from the *Lanka Business Times*

Ceylon cinnamon: premium spice, ageing workforce

Global buyers pay a premium for true Ceylon cinnamon, which has a sweeter flavour and is lower in coumarin than the cheaper cassia cinnamon from other countries. But Sri Lanka faces a shortage of skilled peelers. A government research institute has developed a peeling machine that could double output per worker, although buyers say machine-peeled quills are less even and fetch lower prices.

Resource 2 – Social media posts from Sunil, a peeler for 30 years

My father taught me to peel when I was 12. A good peeler can make a quill a metre long without one crack. KC pays us fairly and on time, and pays for our health insurance. [1/2]

But my son works in a hotel kitchen in Colombo – he says peeling is “old people’s work”. When we are gone, who will peel? Maybe the machines. [2/2]

Resource 3 – Internal email from KC’s finance manager to Nirmala Wickramasinghe

From: Chaminda Ranasinghe, Finance Manager

To: Nirmala Wickramasinghe, Managing Director

Subject: Which products should we keep?

Our accounts (attached) show that the tea blends and the cinnamon leaf oil make losses after we share out our fixed costs, which total LKR 144 million a year and would not change much if a product were dropped. Some directors want to stop both.

However, the tea blends are sold to tourists in our shop and hotels and help build our brand. Leaf-oil distilling employs 12 women during the months when there is little peeling work. A new, more efficient distiller costing LKR 12 million would reduce the variable cost of leaf oil by LKR 1 500 per kg.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – KC product information, 2025

LKR = Sri Lankan rupees.

Resource 5 – Survey of overseas buyers of KC quills (40 replies)

Resource 6 – Interview with Nirmala Wickramasinghe

“If we drop products just because a spreadsheet says so, we may lose jobs and our brand. But we must also be realistic: the peelers are getting older. I want to start a peeling school for young people, paid while they learn, and perhaps use machines for the lower grades of cinnamon, so that hand-peeling is kept for the finest quills where it earns the most.”