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a) A manufacturer of flags has seen a steady increase in sales, which coincides with the start of a major sporting event - HSC - SSCE Business Studies - Question 21 - 2024 - Paper 1
Question 21
a) A manufacturer of flags has seen a steady increase in sales, which coincides with the start of a major sporting event. The operations manager has increased the wo... show full transcript
Worked Solution & Example Answer:a) A manufacturer of flags has seen a steady increase in sales, which coincides with the start of a major sporting event - HSC - SSCE Business Studies - Question 21 - 2024 - Paper 1
Step 1
Explain the interdependence between operations and ONE other key business function for this business.
Answer
The operations department is intricately linked to the finance department of the flag manufacturing business. As sales rise during major sporting events, the operations team will require additional funds to cover the increased hours worked by employees and potential overtime payments. This financial backing is essential for ensuring that production meets the heightened demand for flags. Additionally, the finance department must assess the supply chain for materials, which may necessitate adjustments based on the increased production requirements.
Step 2
How can each of these TWO products affect inventory management?
Answer
Product A (Baby Milk) and Product B (Air Conditioner) can significantly influence inventory management based on their demand characteristics.
For Baby Milk, consistent year-round demand requires careful inventory planning to avoid stockouts. The store may implement a Just-In-Time (JIT) inventory system to ensure that stock is replenished as sales occur, minimizing holding costs while ensuring availability.
For Air Conditioners, demand may be seasonal, peaking during summer months. This variability necessitates strategic forecasting and bulk purchasing in advance of the peak season to prevent inventory shortages. The store might also consider maintaining lower inventory levels during off-peak months to reduce carrying costs.