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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 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 worki... show full transcript
Worked Solution & Example Answer: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 in the manufacturing of flags is intrinsically linked to the finance department. This relationship is pivotal, particularly during a period of increased sales associated with a major sporting event.
When the sales of flags surge, the operations manager must ensure that production can meet this heightened demand. This often requires allocating additional funds for overtime wages, which is where the finance department plays a critical role.
The finance department must provide the necessary financial resources to cover these additional operational costs, including increased staffing and possible improvements in production techniques or resources. Without effective financial support, the operations department may struggle to meet customer demand, potentially leading to lost sales and a negative impact on business reputation.
Therefore, the interdependence is clear: while operations is tasked with the production aspect, its effectiveness relies on financial assistance and guidance to enable it to meet operational goals.
Step 2
How can each of these TWO products affect inventory management?
Answer
In terms of inventory management, Product A (Baby Milk) and Product B (Air Conditioner) present different challenges and strategies.
Product A (Baby Milk): This product typically has a high turnover rate due to its essential nature for consumers. Thus, inventory management must ensure the availability of sufficient stock to meet that demand while being cautious of expiration dates. It requires frequent monitoring and restocking, as shortages could lead to dissatisfied customers.
Product B (Air Conditioner): In contrast, air conditioners are often seasonal items with lower turnover rates. Inventory management for this product necessitates a more strategic approach, especially concerning storage and timing for replenishments before peak demand seasons. Overstocking can lead to high holding costs and potential waste if they are not sold in time.
Overall, effective inventory management for both products is essential to balance availability and cost-efficiency.