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Discuss three types of management control that you would recommend Liam put in place to secure the future of RES Ltd. - Leaving Cert Business - Question B - 2009
Question B
Discuss three types of management control that you would recommend Liam put in place to secure the future of RES Ltd.
Worked Solution & Example Answer:Discuss three types of management control that you would recommend Liam put in place to secure the future of RES Ltd. - Leaving Cert Business - Question B - 2009
Step 1
Stock Control
Answer
Stock control involves maintaining adequate stock levels to meet customer demand while minimizing holding costs. Establishing a robust stock management system ensures that there is enough inventory to fulfill orders without overstocking.
Benefits of Effective Stock Control:
- Ensures adequate stock levels to satisfy customer demand and avoids potential loss of sales.
- Assists in future sales and profits by predicting inventory needs accurately.
- Minimizes storage costs while making effective use of available storage space.
- Identifies slow-moving stock, allowing for better decision-making.
- Reduces risk of stock going out of date or being damaged.
Step 2
Quality Control
Answer
Quality control is critical for maintaining the standards of goods and services offered by a business. This process ensures that products meet defined criteria and customer expectations.
Benefits of Quality Control:
- Enhances the reputation of the business, helping to retain customers and attract new ones.
- Reduces costs associated with faulty goods, such as returns and warranty claims, which can also impact customer loyalty.
- Ensures that every product that leaves the warehouse meets quality standards, thus preventing harm to the brand's reputation.
Step 3
Credit Control
Answer
Credit control is vital for managing a company's policy regarding credit sales. It involves assessing the creditworthiness of customers and setting credit limits to minimize financial risk.
Benefits of Credit Control:
- Firmly controls the amount of goods sold on credit, reducing potential losses from unpaid debts.
- Regular checks on customer credit history to adjust credit limits appropriately.
- Reduces risk of bad debts by monitoring payments and initiating follow-up if necessary.
- Enhances cash flow management by keeping a close eye on receivables.