3.3.2 The role of procurement

Which of the following would be an example of stock for a business operating in the tertiary sector of production?

• Raw materials

• Work in progress

• Semi-finished products

• Finished products

Another common term for stock is:

• Current asset

• Capital

• Inventory

• Reserves

Which of the following is an advantage to a business of using just in time stock control?

• Last minute orders can be met successfully

• Benefits from purchasing economies of scale

• Improved cash flow

• No bottlenecks will occur in the production process

A business operates JIT stock control and wants to increase the number of suppliers used to ensure customer orders are delivered on time. Which of the following would therefore factor in supplier choice?

• Reliability

• Payment terms

• Price

• Ethical values

Effectively overseeing the efficient flow of goods and services throughout the production process from the purchase of raw materials through to completion of the end product is called:

• Supply chain management

• Logistics

• Procurement

• Just in time stock control

When a business buys large quantities of stock, it can often negotiate a cheaper price that results in lower unit costs. This is an example of a:

• Technical economy of scale

• Purchasing economy of scale

• Marketing economy of scale

• Financial economy of scale

Buffer stock can best be described as:

• The maximum amount of stock the business can physically hold

• The amount of stock that arrives in a new delivery

• The minimum amount of stock the business wishes to hold

• The amount of stock a business is holding when a new order is triggered

Which external factor has resulted in logistics becoming an increasingly important area of business operations?

• The growth of e-commerce

• Ageing UK population

• The drive for healthier lifestyles

• Government encouraging entrepreneurs to set up in business

Which of the following is a consequence for a food wholesaler of holding large volumes of stock?

• Low insurance costs

• Low storage costs

• Difficulty in meeting customer demand

• Short shelf life of stock

Which of the following is a benefit to a clothing e-tailer of its suppliers consistently delivering high quality goods?

• increased brand loyalty

• Higher footfall in store

• Customers expect to pay lower prices

• More demand for physical customer service desks