A-LevelBusiness StudiesOperations management9609/12 · May/June 2018 · Q15 Marks

Define the term 'inventory management'.

(a)Define the term 'inventory management'.[2]
(b)Briefly explain two reasons why a business might decide to hold a high level of inventory.[3]

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

[1] The activities involved in maintaining an appropriate/optimal amount/ level of inventory
[1] to assist cash flow and keep costs low
[1] To ensure uninterrupted production/service levels
[1] The management/control/organisation of stock items/suppliers
[1] Overseeing ordering of inventory / storage of inventory
[1] The efficient control of stock levels
[1] One type is JIT (allow other methods)
[3] Sound explanation of two reasons for holding a high level of inventory.
[2] Sound explanation of one reason or partial explanation of two reasons.
[1] Partial explanation of one reason or a list of two.

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Topic: Operations management, A-Level Business Studies (syllabus 9609). Structured question, 5 marks.
Source: A-Level Business Studies, May/June 2018 Paper 1 Variant 2, question 1.

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