AQA A-Level Business (2026) | 3.2.2 Operations management
You're Ivan Tory, the new Inventory Manager at Stock & Roll — the UK's exclusive distributor for four popular tech accessory brands.
Stock & Roll imports tens of thousands of units each year and sells them through its website to customers across the UK. The previous manager left chaos behind. Owner Mo Margin needs you to get inventory under control. You've got 8 weeks to prove yourself before the Christmas rush.
Select a supply source for each product. This decision is locked for all 8 weeks.
Lead time: 1 week
Cost: Product cost + £4 shipping per unit
Reliability: 88%
Air freight from European suppliers. Short lead time means you can hold less inventory. Supports a Just in Time approach.
Lead time: 3 weeks
Cost: Product cost + £1 shipping per unit
Reliability: 94%
Container shipping from Asian suppliers. Longer lead time means you need to hold more buffer inventory. A Just in Case approach.
⚠️ Strategic commitment: Your supplier choices are locked for all 8 weeks—just like real supplier contracts. Choose based on your inventory strategy: short lead times (JIT) or lower costs (JIC).
Stock & Roll Inventory Management
Week 1
of 8
Justin Time
Just in Time advocate
"Keep inventory lean. High turnover means better cash flow. Every unit sitting here costs money."
Casey Stock
Just in Case advocate
"Buffer inventory protects against uncertainty. Service level is what keeps customers coming back."
Revenue
£0
Holding Costs
£0
Service Level = Units Sold ÷ Total Demand × 100
Inventory Turnover = Cost of Sales ÷ Average Inventory Value
Solid performance.
Revenue
£0
Gross Profit
£0
Holding Costs
£0
Avg Inventory Value
£0
See how alternative supplier choices might have affected your results.
These charts show how your inventory levels changed over 8 weeks. The "sawtooth" pattern shows inventory falling (demand) then rising (deliveries arriving).
Effective inventory management balances two competing pressures: holding enough inventory to meet customer demand (service level) while minimising the amount of capital tied up in inventory (turnover).
Businesses hold inventory to: meet customer demand without delay, protect against supply chain uncertainty (as you saw during the shipping crisis), take advantage of bulk discounts, and cope with seasonal demand variations (like Christmas).
Key factors include: lead time (longer lead times require more buffer inventory), demand variability (unpredictable products like BandIt need more safety stock), supplier reliability (the shipping crisis showed why this matters), and holding costs (storage, insurance, obsolescence).
Just in Time (JIT): Minimise inventory, order frequently in small quantities, relies on reliable suppliers with short lead times. Advantage: lower holding costs, better cash flow. Disadvantage: vulnerable to supply disruption.
Just in Case (JIC): Hold buffer inventory to protect against uncertainty. Advantage: can always meet demand, protected against disruption. Disadvantage: higher holding costs, cash tied up, risk of obsolescence.
Formula: Inventory Turnover = Cost of Sales ÷ Average Inventory Value
(Cost of Sales = total cost price of all units sold, not the revenue)
Interpretation: A higher turnover ratio means inventory is selling quickly—good for cash flow. A lower ratio means inventory is sitting in the warehouse—tying up capital. However, very high turnover might mean you're running too lean and risking stockouts. The goal is to find the right balance for your business.