NCERT Class 11 Business Studies Chapter 4 Business Service

NCERT Class 11 Business Studies Chapter 4 Business Service Solutions to each chapter is provided in the list so that you can easily browse through different chapters NCERT Class 11 Business Studies Chapter 4 Business Service Question Answer and select need one. NCERT Class 11 Business Studies Chapter 4 Business Service Solutions Download PDF. NCERT Class 11 Business Studies Textbooks Solutions.

NCERT Class 11 Business Studies Chapter 4 Business Service

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Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. NCERT Class 11 Business Studies Chapter 4 Business Service Solutions are part of All Subject Solutions. Here we have given H.S 1st Year Business Studies Question and Answer, NCERT Class 11 Business Studies Chapter 4 Business Service Solutions for All Chapters, You can practice these here.

Chapter: 4

PART – Ⅰ
EXERCISES

Short Answer Questions:

1. Define services and goods.

Ans: Services are those separately identifiable, essentially intangible activities that provide satisfaction of wants, and are not necessarily linked to the sale of a product or another service. 

A good is a physical product capable of being delivered to a purchaser and involves the transfer of ownership from seller to customer. Goods are also generally used to refer to commodities or items of all types, except services, involved in trade or commerce.

2. What is e-banking? What are the advantages of e-banking?

Ans: In this new digital marketplace banks and financial institutions have started providing services over the internet. These types of services provided by the banks on the internet, called e-banking.

 There are various benefits of e-banking provided to customers which are: 

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(i) E-banking facilitates digital payments and promotes transparency in financial statements. 

(ii) e-banking provides 24 hours, 365 days a year services to the customers of the bank.

(iii) Customers can make some of the permitted transactions from office or house or while travelling via mobile telephone.

(iv) It inculcates a sense of financial discipline by recording each and every transaction.

(v) Greater customer satisfaction by offering unlimited access to the bank, not limited by the walls of the branch and less risk and greater security to the customer as they can avoid travelling with cash.

3. Write a note on various telecom services available for enhancing business.

Ans: In today’s world the dream of doing business across continents will remain a dream in the absence of telecom infrastructure. There have been far reaching developments in the convergence of telecom, IT, consumer electronics and media industries worldwide. 

The various types of telecom services are: 

(i) Cellular mobile services: These are all types of mobile telecom services including voice and non voice messages, data services and PCO services utilising any type of network equipment within their service area. 

(ii) Fixed line services: These are all types of fixed services including voice and non-voice messages and data services to establish linkages for long distance traffic.

(iii) Cable services: These are linkages and switched services within a licensed area of operation to operate media services, which are essentially one way entertainment related services.

(iv) VSAT services: VSAT (Very Small Aperture Terminal) is a satellite based communications service.

4. Explain briefly the principles of insurance with suitable examples. 

Ans: The specific principles of utmost significance to a valid insurance contract consists of the following: 

(i) Utmost good faith: A contract of insurance is a contract of uberrimae fidei i.e., a contract found in utmost good faith. Both the insurer and the insured should display good faith towards each other in regard to the contract.

Example: Health Disclosure.

(ii) Insurable Interest: The insured must have an insurable interest in the subject matter of insurance.Example: Home Ownership.

(iii) Indemnity: All insurance contracts of fire or marine insurance are contracts of indemnity. The compensation payable and the loss suffered are to be measured in terms of money.

Example: Actual Value.

(iv) Proximate Cause: According to this principle, an insurance policy is designed to provide compensation only for such losses as are caused by the perils which are stated in the policy.

Example: Fire Damage.

(v) Subrogation: It refers to the right of the insurer to stand in the place of the insured, after settlement of a claim, as far as the right of insured in respect of recovery from an alternative source is involved.

Example: Third-Party Recovery.

(vi) Contribution: As per this principle it is the right of an insurer who has paid claim under an insurance, to call upon other liable insurers to contribute for the loss of payment.

Example: Proportional Payment.

(vii) Mitigation: This principle states that it is the duty of the insured to take reasonable steps to minimise the loss or damage to the insured property.

Example: Damage Control.

5. Explain warehousing and its functions.

Ans: Warehousing is the process of storing physical inventory for sale or distribution. The warehouse was initially viewed as a static unit for keeping and storing goods in a scientific and systematic manner so as to maintain their original quality, value and usefulness. The typical warehouse received merchandise by rail, truck or bullock cart. The items were moved manually to a storage within the warehouse and hand piled  in stacks on the floor. They are used by manufacturers, importers, exporters, wholesalers, transport business, customs etc., in India.

 The functions of warehousing are discussed as follows: 

(a) Consolidation: In this function the warehouse receives and consolidates materials/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.

(b) Break the bulk: The warehouse performs the function of dividing the bulk quantity of goods received from the production plants into smaller quantities. These smaller quantities are then transported according to the requirements of clients to their places of business.

(c) Stockpiling: The next function of warehousing is the seasonal storage of goods to select businesses. Goods or raw materials, which are not required immediately for sale or manufacturing, are stored in warehouses. They are made available to businesses depending on customers’ demand. 

(d) Value added services: Certain value added services are also provided by the warehouses, such as in transit mixing, packaging and labelling. Goods sometimes need to be opened and repackaged and labelled again at the time of inspection by prospective buyers.

(e) Price stabilisation: By adjusting the supply of goods with the demand  situation, warehousing performs the function of stabilising prices. Thus, prices are controlled when supply is increasing and demand is slack and vice versa.

(f) Financing: Warehouse owners advance money to the owners on security of goods and further supply goods on credit terms to customers.

Long Answer Questions:

1. What are services? Explain their distinct characteristics.

Ans: Services are those separately identifiable, essentially intangible activities that provide satisfaction of wants, and are not necessarily linked to the sale of a product or another service. For a layperson, services are essentially intangibles. Their purchase does not result in the ownership of anything physical. For example, you can only seek advice from the doctor, you cannot purchase him. Services are all those economic activities that are intangible and imply an interaction to be realised between the service provider and the consumer. 

There are five basic features of services. These features also distinguish them from goods and are known as the five Is of services.

These are discussed as below: 

(i) Intangibility: Services are intangible, i.e., they cannot be touched. They are experiential in nature. One cannot taste a doctor’s treatment, or touch entertainment. One can only experience it. An important implication of this is that quality of the offer can often not be determined before consumption and, therefore, purchase. It is, therefore, important for the service providers that they consciously work on creating a desired service so that the customer undergoes a favourable experience. 

(ii) Inconsistency: The second important characteristic of services is inconsistency. Since there is no standard tangible product, services have to be performed exclusively each time. Different customers have different demands and expectations. Service providers need to have an opportunity to alter their offer to closely meet the requirements of the customers. 

(iii) Inseparability: Another important characteristic of services is the simultaneous activity of production and consumption being performed. This makes the production and consumption of services seem to be inseparable. While we can manufacture a car today and sell it after, say, a month; this is often not possible with services that have to be consumed as and when they are produced. 

2. Explain the functions of commercial banks with an example of each. 

Ans: Banks perform a variety of functions. Some of them are the basic or primary functions of a bank while others are agency or general utility services in nature.

The important functions are briefly discussed below: 

(i) Acceptance of deposits: Deposits are the basis of the loan operations since banks are both borrowers and lenders of money. As borrowers they pay interest and as lenders they grant loans and get interest. These deposits are generally taken through current account, savings account and fixed deposits. Current account deposits can be withdrawn to the extent of the balance at any time without any prior notice. 

(ii) Lending of funds: Second major activity of commercial banks is to provide loans and advances out of the money received through deposits. These advances can be made in the form of overdrafts, cash credits, discounting trade bills, term loans, consumer credits and other miscellaneous advances. The funds lent out by banks contribute a great deal to trade, industry, transport and other business activities. 

(iii) Cheque facility: Banks render a very important service to their customers by collecting their cheques drawn on other banks. The cheque is the most developed credit instrument, a unique feature and function of banks for the withdrawal of deposits. It is the most convenient and an inexpensive medium of exchange. There are two types of cheques mainly: (a) bearer cheques, which are encashable immediately at bank counters and (b) crossed cheques which are to be deposited only in the payees account. 

(iv) Remittance of funds: Another salient function of commercial banks is to provide the facility of fund transfer from one place to another, on account of the interconnectivity of branches. The transfer of funds is administered by using bank drafts, pay orders or mail transfers, on nominal commission charges. The bank issues a draft for the amount on its own branches at other places or other banks at those places.

(v) Allied services: In addition to above functions, banks also provide allied services such as bill payments, locker facilities, underwriting services. They also perform other services like buying and selling of shares and debentures on instructions and other personal services like payment of insurance premium, collection of dividend etc.

3. Write a detailed note on various facilities offered by the Indian Postal Department.

Ans: The Postal department offers allied facilities of the following types: 

(i) Greeting post: A range of delightful greeting cards for every occasion. 

(ii) Media post: An innovative and effective vehicle for Indian corporates to advertise their brand through postcards, envelopes, aerograms, tele-grams, and also through letterboxes. 

(iii) Direct post is for direct advertising. It can be both addressed as well as unaddressed. 

(iv) International Money Transfer through collaboration with Western Union financial services, USA, which enables remittance of money from 185 countries to India. 

(v) Passport facilities: A unique partnership with the ministry of external affairs for facilitating passport application. 

(vi) Speed Post: It has over 1000 destinations in India and links with 97 major countries across the globe. 

(vii) e-bill post is the latest offering of the department to collect bill payment across the counter for BSNL and Bharti Airtel.  

4. Describe various types of insurance and examine the nature of risks protected by each type of insurance. 

Ans: Various types of insurance exist by virtue of the practice of insurance companies and the influence of legal enactments controlling the insurance  business. Broadly speaking, insurance may be classified as follows: 

(i) Life insurance: Individuals in the course of their life are always exposed to some kind of risks. The risk may be of an event which is certain that is death. In that case, what will happen to the other members of the family who are dependent on a particular individual’s income. The other risk may be living too long in which an individual may become too old to earn i.e., retirement. In this case also, the earnings will decline or end. Under such circumstances, individuals seek protection against these risks and life insurance companies offer protection against such risks.

(ii) Fire insurance: fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by fire during a specified period up to the amount specified in the policy. Normally, the fire insurance policy is for a period of one year after which it is to be renewed from time to time. The premium may be paid either in lump sum or instalments. A claim for loss by fire must satisfy the two following conditions: 

(a) There must be actual loss. and

(b) Fire must be accidental and non intentional.

(iii) Marine insurance: A marine insurance contract is an agreement whereby the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. Marine insurance provides protection against loss by marine perils or perils of the sea. Marine perils are collision of a ship with the rock, or ship attacked by the enemies, fired and captured by pirates and actions of the captains and crew of the ship. 

5. Explain in detail the warehousing services.

Ans: The functions/services of warehousing are discussed as follows: 

(a) Consolidation: In this function the warehouse receives and consolidates materials/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.

(b) Break the bulk: The warehouse performs the function of dividing the bulk quantity of goods received from the production plants into smaller quantities. These smaller quantities are then transported according to the requirements of clients to their places of business.

(c) Stockpiling: The next function of warehousing is the seasonal storage of goods to select businesses. Goods or raw materials, which are not required immediately for sale or manufacturing, are stored in warehouses. They are made available to businesses depending on customers’ demand. 

(d) Value added services: Certain value added services are also provided by the warehouses, such as in transit mixing, packaging and labelling. Goods sometimes need to be opened and repackaged and labelled again at the time of inspection by prospective buyers. Grading according to quantity and dividing goods in smaller lots is another function.

(e) Price stabilisation: By adjusting the supply of goods with the demand  situation, warehousing performs the function of stabilising prices. Thus, prices are controlled when supply is increasing and demand is slack and vice versa.

(f) Financing: Warehouse owners advance money to the owners on security of goods and further supply goods on credit terms to customers.

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