Syllabus: SQA - Higher Course Spec Business Management
Module: Management of Operations
Lesson: Inventory Management

Introduction

Inventory management is a key element of the “Management of operations” unit in the SQA Higher Business Management course. This topic focuses on how businesses control stock efficiently to ensure smooth operations, reduce costs, and meet customer demand. It aligns directly with the SQA’s learning outcomes by asking students to apply theoretical knowledge to practical business challenges, and it’s a crucial stepping stone for understanding broader operational decisions in real-world contexts.

Key Concepts

Students are expected to understand and apply the following inventory management concepts:

• Stock control methods: Just-in-time (JIT), Just-in-case (JIC), and computerised inventory systems.

• Types of inventory: Raw materials, work-in-progress, and finished goods.

• Stock level terminology: Maximum, minimum, reorder level, and reorder quantity.

• Consequences of poor stock management: Overstocking and understocking, and their impact on cost, space, cash flow, and customer satisfaction.

• Inventory recording tools: Use of stock control charts and electronic systems like barcodes or EPOS.

These topics encourage students to think critically about operational efficiency and resource use.

Real-World Relevance

Stock control isn’t just theory. It shows up everywhere, from supermarkets like Tesco managing perishables to car manufacturers like Toyota using JIT to streamline production. For example, during the pandemic, supply chain disruptions revealed just how vital agile inventory systems are. Students can explore how businesses adjusted stock strategies in response to global shipping delays and rising costs, making the topic immediate and relevant.

A school-friendly case study: A local café might run into issues by overstocking milk and bread, leading to waste, or understocking pastries during busy weekends, missing sales. These small-scale examples can bridge theory to practice in lessons.

How It’s Assessed

In the SQA Higher Business Management exam, inventory management typically appears in the form of:

• Short-answer questions: Define or describe a method or consequence of inventory control.

• Scenario-based questions: Apply inventory concepts to business situations.

• Extended response questions: Analyse or evaluate inventory strategies in a given context.

Command words include “explain”, “describe”, “analyse”, and “justify”. It’s vital students understand these, as marks depend on how well they link knowledge to context.

Enterprise Skills Integration

Inventory management builds several enterprise skills:

• Decision-making: Choosing between JIT or JIC based on business needs.

• Problem-solving: Tackling issues like stockouts or waste.

• Numeracy and data handling: Interpreting stock charts or reorder points.

• Planning and organisation: Understanding how systems support operations.

Using simulations or roleplay—such as managing stock for a mock business—can make these skills tangible.

Careers Links

Inventory management links strongly to Gatsby Benchmarks 4 and 5. It supports:

• Careers in logistics and supply chain: Warehouse managers, procurement officers, operations analysts.

• Retail and e-commerce roles: Stock controllers, merchandising assistants, fulfilment coordinators.

• Manufacturing and production: Planners and quality controllers.

A visit or virtual tour of a local warehouse or supermarket stockroom can add a real-world layer to classroom learning.

Teaching Notes

Tips for delivery:

• Use real products from the school or classroom to demonstrate stock types.

• Set up mock businesses for students to apply JIT/JIC decisions.

• Use visual aids like stock charts and reorder point diagrams regularly.

Common pitfalls:

• Students often confuse JIT with JIC—clear examples help differentiate.

• Overlooking the consequences of poor stock control—get students to think practically (e.g., what happens if we run out of PE kits or test papers?).

Extension activities:

• Ask students to design an inventory system for a school tuck shop or prom event.

• Analyse a real business’s stock strategy and suggest improvements.