Photo AI
A fruit shop has experienced strong growth in its sales of fresh organic fruit since it started to sell online - HSC - SSCE Business Studies - Question 24 - 2016 - Paper 1
Question 24
A fruit shop has experienced strong growth in its sales of fresh organic fruit since it started to sell online. (a) Discuss ONE possible method of inventory managem... show full transcript
Worked Solution & Example Answer:A fruit shop has experienced strong growth in its sales of fresh organic fruit since it started to sell online - HSC - SSCE Business Studies - Question 24 - 2016 - Paper 1
Step 1
Discuss ONE possible method of inventory management for this business.
Answer
One possible method of inventory management for this fruit shop is the Just-In-Time (JIT) inventory system. The primary advantage of JIT is that it minimizes the amount of inventory held at any one time, thus reducing the costs associated with storage and waste, especially for perishable goods like fresh fruit.
By adopting JIT, the business can order fresh stocks as they are needed, ensuring that they have sufficient quantities to meet customer demand without overstocking. However, a notable disadvantage is that, in the event of a sudden increase in demand, the shop risks not having enough stock available to fulfill orders. This can lead to missed sales opportunities and dissatisfied customers. Hence, while JIT can be beneficial for managing fresh produce effectively, careful monitoring of sales trends and supplier reliability is crucial to its success.
Step 2
Explain why corporate social responsibility should be a key concern in operations management for this business.
Answer
Corporate social responsibility (CSR) is vital for the fruit shop's operations management for several reasons. Firstly, being socially responsible can enhance the shop's reputation, attracting customers who prioritize ethical business practices, especially those interested in organic products.
Additionally, CSR practices can lead to sustainable sourcing and supply chain management, ensuring that the business supports local farmers and reduces its carbon footprint, which is increasingly important to environmentally-conscious consumers. By integrating CSR into its operations, the shop not only contributes positively to society but also builds a loyal customer base that values transparency and responsibility.