alevel商务真题解析

alevel商务真题解析：

Explain the costs and benefits to a business of a decision to hold low levels of inventory.

解析

Answers could include:

Costs such as:

Insufficient stock to meet demands – lost sales

Lack of raw materials leads to idle production resources

Unable to respond to exceptional/new orders quickly

If not buying large quantity of inventory, miss out on bulk buying discounts (JIT).

Benefits:

Opportunity cost of capital invested in inventory is reduced

Reduced storage costs

Reduced risk of wastage/obsolescence

Easier to organise and retrieve inventory.

Very much depends on the type of business activity involved and whether demand is normal or exceptional. It is a trade-off between benefits and risk of incurring costs.

知识点：Inventory management

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