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ACCA Applied Knowledge · Business and Technology · Technological factors

A retailer links its point-of-sale tills directly to its warehouse system so that when stock falls to a set level, a replenishment order is generated automatically. What is the main operational benefit of this arrangement?

The main benefit is a reduced risk of stock-outs together with less manual ordering effort. Linking sales data to the warehouse system triggers replenishment at set levels automatically. It does not remove inventory holding, guarantee lower supplier prices, or remove the need for purchasing controls.

  1. AReduced risk of stock-outs and lower manual ordering effortCorrect
  2. BElimination of the need for any inventory holding
  3. CGuaranteed lower prices from all suppliers
  4. DRemoval of the need for internal controls over purchasing

Explanation

Automatic reorder triggers based on real-time sales data reduce stock-outs and administrative effort. It does not eliminate inventory, guarantee supplier prices, or remove the need for controls, which remain necessary over automated purchasing.

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