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Transcription of this question: 5.Eat WellEat Well is a small family-run, local restaurant that prides itself on excellent service and localdishes made from fresh ingredients. Kaa Lee, the chef, is in charge Of ordering the ingredients anddevising the menu. Currently, he uses a daily just-in-time (JIT) stock control method, ordering fromlocal farmers.Kaa is concerned about:• a fall in demand caused partly by a new organic restaurant that opened recently in the areafrequent delays in deliveries Of ingredients from local farmers• some cash-flow problems resulting from credit given to loyal customers and from purchasingingredients dailycustomers becoming more demanding, for instance desiring more varied menus with fewerlocal dishesthe government becoming stricter with health and safety regulations in the food service industry• a recent increase in the level Of tax (as this has increased the current liabilities Of Eat Well)• changing trends in eating out habits.Kaa wants to carry out market research to determine how to attract more customers and how tocompete more effectively.He is also considering a move to a more traditional just-in-case (JIC) stock control method,and ordering from one single wholesaler located in the regional capital. Kaa is unsure Of whichmethod Of stock valuation to use: last-in-first-out (LIFO) or first-in-first-out (FIFO).(a)(b)(c)(d)Define the following terms:(i) current liabilities(ii) wholesaler.Explain the effects on Eat Well S profit and loss account resulting from usingLIFO and FIFO stock valuation (figures are not required).Analyse Kaa’s decision to change Eat Wells stock control method tojust-in-case (JIC).Discuss the usefulness Of market research for Kaa in order to “determine howto attract more customers and how to compete more effectively”[2 marks/[2 marks/[6 marks][6 marks][9 marks]

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