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Which of the following would be an effective management strategy to improve the long-term profitability of a business? (A) Altering the credit terms to ensure early payment of receivables (B) Improving the efficiency of cost centres (C) Selling of non-productive assets (D) Factoring of accounts receivable - HSC - SSCE Business Studies - Question 10 - 2001 - Paper 1
Question 10
Which of the following would be an effective management strategy to improve the long-term profitability of a business? (A) Altering the credit terms to ensure early... show full transcript
Worked Solution & Example Answer:Which of the following would be an effective management strategy to improve the long-term profitability of a business? (A) Altering the credit terms to ensure early payment of receivables (B) Improving the efficiency of cost centres (C) Selling of non-productive assets (D) Factoring of accounts receivable - HSC - SSCE Business Studies - Question 10 - 2001 - Paper 1
Step 1
Improving the efficiency of cost centres
Answer
Improving the efficiency of cost centres (Option B) is a strategic approach that can significantly enhance the long-term profitability of a business. By streamlining operations, reducing waste, and optimizing resource usage, a business can lower its operational costs. This can lead to increased margins on products and services offered, thus directly contributing to long-term profitability.