A Level Business: Operations Management — Practice Questions (Cambridge 9609)

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs — Cambridge International holds copyright in its own papers. Use these alongside the official past papers available from your board.

---

Questions

1. Define the term re-order level, and explain how it differs from buffer inventory. [2]

2. A shop uses 50 units a day. The supplier’s lead time is 6 days and the shop keeps a buffer inventory of 100 units. Calculate the re-order level. [2]

3. State one advantage and one disadvantage to a business of just-in-time (JIT) inventory management. [2]

4. A factory produces 3600 units a month. Its maximum capacity is 4500 units a month. Calculate its capacity utilisation. [2]

5. Define labour productivity and give one way a business could increase it. [2]

Answers

1. The re-order level is the level of inventory at which a new order is placed with the supplier [1]; it is set so the delivery arrives before inventory falls below the buffer inventory, the minimum safety level kept to cover unexpected demand or late deliveries [1].

Examiner insight (June 2025): weaker answers confused the re-order level with just-in-time inventory management and wrote about low inventory holding costs. The re-order level belongs to a traditional inventory system that holds buffer inventory. Try the real question next: Cambridge International AS & A Level Business 9609, June 2025, Paper 12, Question 3.

2. Usage during the lead time = 50 × 6 = 300 units [1]; re-order level = 300 + 100 = 400 units [1].

3. Advantage: lower inventory holding costs (less storage space, less waste) [1]. Disadvantage: production can stop if a supplier delivers late, because there is no buffer inventory [1].

4. 3600 ÷ 4500 × 100 [1] = 80% [1].

5. Output per worker in a given period [1]; for example, training, better equipment or improved motivation [1].

---

Where marks are usually lost

• Confusing the re-order level with JIT.
• Forgetting to add the buffer inventory when calculating the re-order level.
• Calculating capacity utilisation the wrong way round.