Question 1:

The figure below shows how stock and inventory move through a supply chain. In this sense, inventory can be defined as the value of the sum of Raw materials, WIP items and Finished goods.

Inventory comprises three (3) parts. Below is a diagram illustrating the following:

• The start and end point of the supply chain.
• The three (3) parts of the inventory process within the supply chain.
• The flow (direction) of each part within the supply chain.
• The suppliers and consumers.

Examine the information in Figure 1, and study the compulsory source listed below.

Identify the Suppliers, Raw materials, Work in progress, Finished goods and Consumers as depicted in the compulsory source. (12 marks)

*Note to students:
– A maximum of four (4) marks may be awarded for identifying the location of each supplier (4 marks).
– A maximum of three (3) marks may be awarded for accurately identifying the raw materials.
– A maximum of two (2) marks may be awarded for accurately identifying the WIP items.
– A maximum of two (2) marks may be awarded for accurately identifying the finished goods.
– A maximum of one (1) mark may be awarded for accurately identifying the correct consumer.

In your own words, outline the relationship between RFID technology and scanners. (5 marks)

Examine the article extract provided below and answer the question that follows:

The use of RFID technology for Inventory Management
Effective inventory management means efficient control of items in the inventory to avoid either under-stocking or over-stocking. Item tracking hedges against theft or diversion. The standard method of inventory management is using printed bar codes and handheld or fixed scanners to control and track inventory and equipment. RFID technology provides a much more efficient and comprehensive solution.

Briefly describe ten (10) benefits associated when using RFID technology in stock control and inventory management. (10 marks)

Discuss the three (3) major uncertainties that stock is used to mitigate against. Additionally, to substantiate your answer, conduct research and provide one (1) practical example for each type of uncertainty. (6 marks)

*Note to students
– A maximum of one (1) mark may be awarded for accurately discussing each type of major uncertainty used to mitigate against the stock. (1 + 1 + 1 = 3)
– A maximum of one (1) mark may be awarded for accurately providing an example of each major type of uncertainty used to mitigate against the stock. (1 + 1 + 1 = 3)

Question 2: (37 Marks)
Read the extract below and answer the questions that follow:

Businesses hold inventory at different stages of completion, including but not limited to raw materials, work-in-process goods and finished goods. Together with the balancing of supply and demand, and the buffering of inventory against the uncertainties in supply and demand, decoupling is one of the broad categories into which the functions of inventory can be classified.

2.1. Explain, in your own words, the use of decoupling in stock and inventory management. (4 marks)

Match the correct term in Column A with the correct description in Column B. (4 marks)

Term (Column A) Description (Column B)


2.2.1 Push strategy

A. A system used to update the management of The Bushveld Lodge on the expected number of clients receivable (+- 300 clients) in the month of February. As a result, James is pre-ordering additional stock to ensure he

can meet the requirements of his guests.



2.2.2 Supply Chain

B. John is responsible for ensuring that all the goods on hand, which involves (electronics, consumable goods and furniture) are readily available so that clients do not have

to wait for their products to be ordered.

2.2.3 Inventory


C. The following products are in store (Cushions, Towels

and Candles).



2.2.4 Stock

D. The process of ensuring that the bananas from the farm in Limpopo safely, securely and effortlessly make their way to all major wholesalers and retailers for ultimate


Read the hypothetical scenario below and answer the question that follows: A consumers experience of retailing in South Africa

Angelique and James are two working-class parents. Angelique and James work daily from 05:00 am to 7:00 pm to provide for their children, Mich and Tich. Because of their busy schedule, they don’t have time to go about and enjoy shopping obligations for the household, as most other parents do. Instead, they must plan each errand to prioritise their funds to fit within their family’s financial limits.

It is the beginning of the 2024 school year, and Angelique and James must allocate time to buy some school necessities, such as new school uniforms and blazers for Mich and Tich. The increasing inflation levels and the overall rise of costs forces Angelique and James to save up in advance to provide these necessities.

As a hobby, Angelique and James collect adverts from ACD Clothing and Eazy Clothing – where the best deals on school uniforms are currently available. Both are well-known and respective high-quality brands. Because of their budgetary constraints, they decided to go to ACD Clothing first because they had the best deals on offer ‘buy two pairs and receive your third one for absolutely free’. These specials were included for the following stock items: shoes, socks, shirts, blazers, pants and ties. This was a clear win-win for Angelique and James. Both have been loyal customers of ACD Clothing, and it is also the closest retail store to their residences.

Upon Angelique’s arrival at ACD Clothing, she asked at the reception about the adverts promoted, and received nothing but a rude nod and glimpse from the ACD employees. The manager of the store also reeked of alcohol. Angelique and James decided to carry on and walked through the aisles, and to their disappointment, they quickly realised most stock items were not on sale and most stock items were not available on the shelves.

To their disappointment and frustration, they left the store and went to Eazy Clothing, a few hundred metres away. Angelique and James were able to buy all the necessary goods they required within 5 minutes. On their way back home, they decided that they will never support ACD Clothing stores again and they will tell everyone in their area

Discuss the consequence of the cost of a lost sale concerning an organisation’s stock and inventory management. Ensure to apply your answer to the scenario provided above. (22 marks)

Student note: Most marks will be awarded for applying the theory to the scenario. Do more than merely replicate theory as is from the textbook.

Provide one (1) practical solution for the costs of a lost sale in managing stock and inventory processes. Apply your answer to the scenario provided in question 2.3.1 above. (7 marks)

Question 3: (17 Marks)
In your own words, explain the importance of ‘Work in process’ goods concerning stock control and inventory management. In addition, conduct research, and provide a practical example of a work in process item which can be found at any manufacturing organisation. (3 marks)

Briefly discuss the two (2) types of ‘Work in process’ goods. Additionally, research and provide one (1) example for each type of work in process goods listed. (4 marks)

In chronological order, list each step of the accounting for the work in process goods process. (4 marks)

Read the extract below and answer the question that follows:

Finished goods are the items that have been through the entire production process and are held by a business, awaiting distribution. The amount of finished goods that a business holds at a certain time is determined by internal and external factors, such as lead time and costs.

Additional information:
Some of the factors that businesses consider when determining the quantities to be held as finished goods inventory include, but are not limited to:
• Financial factors
• Suppliers
• Lead time
• Product type
• Competitors

As a stock control and inventory manager, you must discuss two (2) additional factors of consideration not listed above. (6 marks)

Question 4: (13 Marks)
Study the graph below, and answer the question that follows:

Discuss the relationship between Safety Stock and Stock Control Inventory Management in your own words. (7 marks)

List four (4) reasons why businesses hold safety stock. (4 marks)

You decided to attend a TEDx conference based in Moscow, Russia. The conference aims to focus on minimising the effects of the cost of a lost sale. List two
(2) methods which can be used to calculate the cost of a lost sale. (2 marks)

Answers to Above Questions on Inventory Management

Answer 1: Inventory management is one of the crucial parts of an entire supply chain management. The process includes the number of activities to be carried out such as processing of raw materials, work in progress items, finished goods etc. An analysis of the compulsory source indicates the suppliers, raw materials, work in progress, finished goods and consumers in the case of the Cocoa Foundation. The suppliers are mainly the..


Get completed answers on the above questions on inventory management as offered by the Student Life Saviour South Africa experts.

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