Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which element of the purchasing mix focuses on the amount of goods ordered?

1. Quality

2. Price

3. Quantity

4. Delivery

The correct answer is: Quantity

The element of the purchasing mix that focuses on the amount of goods ordered is quantity. This aspect is critical as it determines how much inventory a business will have on hand to meet customer demand. The quantity ordered affects overall purchasing efficiency, inventory management, and ultimately the financial performance of the business. Understanding the right quantity to order is essential for avoiding stockouts (which can lead to lost sales and dissatisfied customers) or overstocking (which can lead to increased holding costs and potential waste). Businesses often analyze historical data, forecast trends, and consider lead times to make informed decisions regarding the quantity of goods to order, ensuring they find a balance that supports their operational needs and financial health. While other elements of the purchasing mix, such as quality, price, and delivery, are also vital in the procurement process, they do not directly pertain to the specific measure of how much is being ordered. Quality focuses on the standard of the goods, price looks at the cost aspect, and delivery addresses the logistics and timing of getting the goods to the buyer.