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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

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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. **Stock Control** This is the monitoring of ... show full transcript

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

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Answer

Effective stock control is critical for maintaining the balance between supply and demand in Liam's business. This method ensures that the stock levels are sufficient to satisfy customer needs while minimizing holding costs. By implementing a robust stock control system, Liam can:

  • Ensure adequate stock levels to prevent potential loss of sales.
  • Minimize storage costs while utilizing available space efficiently.
  • Identify and forecast stocking needs accurately to avoid overstocking or stockouts, thus protecting revenue streams.
  • Reduce risks associated with outdated or damaged inventory, contributing to overall operational efficiency.

Step 2

Quality Control

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Answer

Quality control is essential to maintain the company's reputation and customer satisfaction. By checking the quality of goods or services offered, Liam can implement measures to:

  • Ensure that products meet prescribed quality standards, thus preserving customer trust.
  • Minimize returns and complaints, reducing associated costs and enhancing customer experiences.
  • Maintain a consistent level of quality that can positively impact repeat business and brand loyalty, safeguarding against loss of sales.

Step 3

Credit Control

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Answer

Implementing strong credit control measures is critical for cash flow management. Liam should ensure that proper checks are in place by:

  • Setting strict limits on credit terms to minimize the risk of bad debt.
  • Regularly assessing the creditworthiness of customers to ensure they can meet payment terms.
  • Monitoring accounts to ensure timely payments, thus reducing cash flow problems.
  • Setting clear policies for late fees and penalties to encourage timely payments, which will contribute to financial stability.

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