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CAIE A-Level Business 4.2.1 Managing Inventory

Practise analysing raw material, work-in-progress and finished-goods inventory, interpreting control measures and evaluating stock or supply-chain choices for the case.

Syllabus
2026–2028
Course
Business 9609
Level
AS

Exam points

  • distinguish raw materials, work in progress and finished goods and explain why each is held
  • use buffer inventory, reorder level and lead time to interpret a simple stock-control chart
  • evaluate high stock, JIT or supply-chain management through cost, risk and service continuity

4.2.1—Managing inventory question 1

[Maximum number: 12]

Direct News (DN)

Shila and Lucy own and manage DN, an online publishing business. DN produces a daily online local newspaper called QNews. Readers pay a subscription to access QNews. DN's mission statement is: 'to be a daily community newspaper for local people, about local people'.

DN recently tested a monthly online magazine aimed at the 18-30 age group called QLine. DN's plan is to stop publishing QNews and produce only QLine. Secondary market research suggests QLine will be popular with national businesses wanting to promote their products.

Shila is aware that revenue from online newspapers is decreasing. However, she has found national market research data about online monthly magazines (see Table 2.1).

Table 2.1 National revenue for online monthly magazines

Table 2.1 National revenue for online monthly magazines

Shila thinks that before the business decides to produce QLine, more market research data will be needed. Shila and Lucy will have to decide on new objectives for DN.

To ensure a quality product that meets customer expectations, Lucy thinks it is important to have careful management of the supply chain, from content creation to customer delivery.

Evaluate the importance to DN of effective supply chain management.

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