Question detail
Harbour Hire serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?10,035, sales of 885 units, and a 38% change in costs or demand. Which option best applies Explain the benefits and costs of holding spare stock and buffer stock?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
The role of procurement
Question
- A. Use stock, buffer stock to judge gross profit margin, employees impact, and the business objective in Managing stock.
- B. Give only a definition of The role of procurement without using the case evidence.
- C. Treat fixed and variable costs as identical and ignore the effect on employees.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use stock, buffer stock to judge gross profit margin, employees impact, and the business objective in Managing stock.
Explanation
This is the best-supported choice because Use stock, buffer stock to judge gross profit margin, employees impact, and the business objective in Managing stock. The case evidence gives ?11,535, 885 units, and 38%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse fixed and variable costs, miss the employees, or ignore the business objective.
Common mistake
Managing stock common mistake 1
Giving a vague answer instead of directly addressing: Explain the benefits and costs of holding spare stock and buffer stock..
Answer by clearly explaining how to explain the benefits and costs of holding spare stock and buffer stock..
Related flashcards
Flashcard 1 of 5
Related practice questions
Question 1 of 5
Choose an answer, get feedback, then move sideways through the set.