Hall's Office Supplies Is a Small Store in a Rural

question 33

Multiple Choice

Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs) . Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
-Ian wants to do everything possible to save money in the store's operations. Based on the preceding scenario, he is least likely to be able to:

• A) Take advantage of quantity discounts from vendors.
• B) Take advantage of cash discounts for early payment of vendor invoices.
• C) Minimize the space devoted to inventory storage.
• D) Control salary costs.

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Definitions:

Departmentalization

A process of grouping people with related job duties, skills, and experiences into different areas within the overall organizational structure.

Span of Control

A management concept that refers to the number of subordinates a supervisor or manager can effectively manage and control.

Bureaucracy

An organizational style characterized by formalized rules and regulation, specialized routine tasks, division of labor, and centralized authority.

Specialization

The process of focusing on a narrow area of expertise to become more efficient and productive in that area.