Skip to content

ACCA Strategic Professional · Advanced Performance Management · Performance improvement models and techniques

Dunmore Retail benchmarks inventory turnover across its 40 stores and finds that Store 12 achieves 11 times per year against a company average of 7. Management proposes to copy Store 12's stock policies chain-wide immediately. Which concern is most valid?

The most valid concern is that Store 12's high turnover may result from local factors like product mix or location rather than better practices, so the policies may not transfer. Benchmarking needs root-cause analysis of why the gap exists before practices are copied across the chain.

  1. AStore 12's figure may reflect local factors such as product mix or location, so the practices may not transferCorrect
  2. BInternal benchmarking cannot be used for inventory measures
  3. CTurnover figures from one store are always unreliable
  4. DBest practice is only relevant when it comes from external organisations

Explanation

A key limitation of benchmarking is that differences in context, such as product mix, store size or customer base, can explain the gap, so analysis of the causes is needed before copying practices. Internal benchmarking is valid for inventory, and best practice can be internal.

Did you get it right without looking?

One question tells you little. A timed set on Performance improvement models and techniques shows your real accuracy, how long you take and where you lose marks.

Practise Performance improvement models and techniquesFree diagnostic mock

More Performance improvement models and techniques questions