Leaving Cert Business Management Activities (Plan, Organise, Control): Evaluate the effectiveness of th

Question

Evaluate the effectiveness of the systems of management control in operation at Atlantic Surf. (30 marks)

Stock Control is concerned with keeping optimum stock levels so that Atlantic Surf doesn't have too much stock or too little stock. Effective stock control means that you have the optimum level of stock/adequate stocks in your business to meet the needs of your consumers, while at the same time keeping them to a minimum.

Optimum stock levels lead to efficiencies because you have the right stock, in the right place, at the right time to meet production requirements and satisfy consumer demand.

Stock control can enhance efficiencies by eliminating the costs associated with carrying too much stock like stock shrinkage and administration costs resulting from too much stock and production stoppages due to a lack of raw materials and components for production, and lost sales because of a lack of finished goods for sale.

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"While very pleased with the high stock turnover of the Atlantic Surf branded beach clothing......

Evaluation required

Quality Control is concerned with checking/reviewing inspection work done to ensure it meets the required quality standards of the business. It will involve physical inspections, quality circles etc.

As part of a quality control system Atlantic Surf may achieve a quality control symbol such as an ISO 9000 award. This symbol may be recognized worldwide and would be a huge benefit for Atlantic Surf in marketing its products internationally, quality producers are being sought, resulting in repeat purchasing, consumer loyalty and the ability to charge higher prices.

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"The shop sells high quality stock including wetsuits, surfboards, kite surfing equipment and Atlantic Surf branded beach clothing."

OR

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"Karen believes quality development is key to business success and she is hoping to apply for Quality Standard Certification in the near future."

Evaluation required

Credit Control means controlling the amount of credit given to customers and the payment period given to customers. Good credit control ensures that payments are made in full and on time. It involves checking credit worthiness of customers, setting credit limit, credit periods and deciding on penalties for late payments. It seeks to minimise bad debts.

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"From the beginning Karen adopted a cash sales only policy with customers."

Evaluation required

Financial Control/Budgetary Control The aim of financial control is to ensure overall business profitability and liquidity (ability to pay bills due). Financial control involves preparing Cash Flow budgets, ratio analysis, and employing cost control measures (e.g., utilities, wages etc). These can provide early warning of possible financial problems.

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"To assist with cash flow, Karen decided to use the website to highlight offers such as 6 surfing lessons for the price of 5 if payment is made in advance."

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"She negotiated a 30 day credit period..."

Evaluate the effectiveness of the systems of management control in operation at Atlantic Surf - Leaving Cert Business - Question C - 2014

Worked Solution & Example Answer:Evaluate the effectiveness of the systems of management control in operation at Atlantic Surf - Leaving Cert Business - Question C - 2014

Stock Control

Quality Control

Credit Control

Financial Control/Budgetary Control

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