Observation

• Some of the candidates who attempted the (a) part of the question had difficulty listing correctly the features of a bond.

  (a)        Explanation of terms

  • Bonded warehouse: This is a warehouse where goods are kept until custom duty is paid on them.
  • Mark-down pricing: It is a deliberate reduction in the selling price of goods and services in order to increase sales.
  • Re-order level: This is the level at which order for replacement or replenishment of stock must be placed. It is above the minimum stock level.
  • Stocktaking: It is the physical counting of all items held in the store against stock records. This exercise can be done periodically or perpetually.

                         
  (b)       (i) Functions of ABC Stores to Kokoview Ltd

  • It provides warehousing facility for the product;
  • It advertises the product on behalf of the company;
  • It finances the company through advanced payments;
  • It provides market information about the product;
  • It carries out market research on behalf of the company;
  • It ensures price stability for the manufacturer’s product;
  • It provides transportation facilities for the product;
  • It bears the risk of losses and damages on the product during distribution;
  • It buys in bulk from the manufacturer.

   

  (ii)  Retailers of the TV sets

  • It breaks bulk and sell in small units to the retailer;
  • It allows retailer to buy on credit;
  • It provides variety of goods;
  • It renders after sale services to the retailer;
  • It provides technical information about the product;
  • It provides delivery services to the retailer;
  • It provides advice to the retailer.