Lesson 3.4.5

3.4.5 Making operational decisions: managing inventory and supply chains Quiz: AQA Business, Unit 4

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.4.5, Making operational decisions: managing inventory and supply chains: 20 multiple choice questions for the AQA Business (7132), Unit 4: Operational management, written with Revision Ninja.

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The 20 questions

  1. What is defined as the time taken between placing an order and receiving inventory?

    • Maximum stock
    • Buffer stock
    • Re-order level
    • Lead time

  2. What term describes the extra inventory held to protect against unexpected delays or demand?

    • Maximum stock
    • Buffer stock
    • Re-order level
    • Lead time

  3. What inventory level triggers a new order to ensure stock does not run out?

    • Lead time
    • Buffer stock
    • Re-order level
    • Maximum stock

  4. What is the practice of manufacturing goods only after receiving a customer order?

    • Just-in-case production
    • Buffer stocking
    • Mass customisation
    • Producing to order

  5. What term describes contracting an external business to perform a specific operational activity?

    • Subsidising
    • Outsourcing
    • Delayering
    • Offshoring

  6. How does employing temporary staff primarily help a business manage operational supply?

    • Eliminates wage costs
    • Increases labour flexibility
    • Reduces unit quality
    • Increases fixed overheads

  7. On an inventory control chart, what does the re-order quantity represent?

    • Amount stock ordered
    • Maximum stock capacity
    • Minimum stock level
    • Time between orders

  8. A business's average daily usage is 80 units, its lead time is 5 days and its buffer stock is 100 units. What is the re-order level?

    • 500 units
    • 400 units
    • 180 units
    • 100 units

  9. Daily usage is 50 units, the re-order level is 350 units and buffer stock is 100 units. What is the lead time?

    • 10 days
    • 5 days
    • 3.5 days
    • 7 days

  10. What term describes running completely out of inventory to meet customer demand?

    • Overstocking
    • Buffer stock
    • Lead time
    • Stockout

  11. Which operational factor measures the time taken between placing and receiving an order?

    • Unit cost
    • Buffer level
    • Lead time
    • Re-order quantity

  12. What is a major financial advantage of outsourcing operational activities to specialist providers?

    • Lower fixed costs
    • Zero variable costs
    • Higher overhead costs
    • Guaranteed sales revenue

  13. What inventory strategy helps a business minimise high inventory holding costs?

    • Larger infrequent orders
    • Smaller frequent orders
    • Raising re-order levels
    • Increasing buffer stock

  14. Hiring extra temporary staff during peak summer periods is an example of what strategy?

    • Matching supply to demand
    • Outsourcing production
    • Producing to order
    • Reducing capacity

  15. What is the main operational benefit of a producing-to-order strategy?

    • Reduced holding costs
    • Increased lead time
    • Higher inventory levels
    • Lower unit efficiency

  16. What is a primary operational drawback of outsourcing key supply chain tasks?

    • Higher fixed costs
    • Loss of control
    • Increased buffer stock
    • Lower total demand

  17. Average daily usage is 60 units, the lead time is four days and buffer stock is 80 units, giving a re-order level of 320. If the supplier cuts lead time to two days, what re-order level is needed?

    • 240 units
    • 200 units
    • 120 units
    • 320 units

  18. What inventory concept provides a safety margin against unexpected demand spikes or delays?

    • Lead time
    • Maximum inventory
    • Re-order level
    • Buffer stock

  19. Supplier A charges £5 per unit with 5% defects. What is the cost per good unit?

    • £5.26
    • £5.50
    • £5.25
    • £5.00

  20. Why might a business choose to hold higher levels of inventory?

    • Prevent stockouts
    • Increase depreciation
    • Lower storage space
    • Reduce holding costs

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