Question detail
MetroMove serves commuters while opening a second outlet; the case evidence includes net profit margin of ?9,500, sales of 240 units, and a 9% change in costs or demand. Which option best applies Explain the benefits of reduced stock costs and the risks of frequent deliveries and lost purchasing economies?
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 to judge capacity utilisation, customers 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 break-even and profit as identical and ignore the effect on customers.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use stock to judge capacity utilisation, customers impact, and the business objective in Managing stock.
Explanation
Choose this response because Use stock to judge capacity utilisation, customers impact, and the business objective in Managing stock. The case evidence gives ?11,000, 240 units, and 9%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse break-even and profit, miss the customers, or ignore the business objective.
Common mistake
Managing stock common mistake 1
Giving a vague answer instead of directly addressing: Explain the benefits of reduced stock costs and the risks of frequent deliveries and lost purchasing economies..
Answer by clearly explaining how to explain the benefits of reduced stock costs and the risks of frequent deliveries and lost purchasing economies..
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