(a) List four features of a self service shop. (b)State four disadvantages of a self service shop. (c)State four importance of working capital to a business...

Answer Details

(a) Four features of a self-service shop

1. Goods are openly displayed on shelves with prices clearly marked (pre-packed and price-labelled).
2. Customers pick the goods themselves into baskets or trolleys without the help of shop attendants.
3. Payment is made once at a central checkout (cash) point near the exit.
4. There are few sales assistants; the shop relies on a wide variety of goods and self-selection by customers.

(b) Four disadvantages of a self-service shop

1. There is a high risk of shoplifting/pilfering since goods are openly displayed.
2. It requires large capital to set up the shelves, wide stock and checkout facilities.
3. There is no personal attention or advice to guide customers on their choice.
4. Customers may waste time queuing at the checkout during busy periods, and there is difficulty selling goods that need demonstration or bargaining.

(c) Four importance of working capital to a business

1. It is used to purchase stock and raw materials needed for daily trading.
2. It enables the business to pay running expenses such as wages, rent and utility bills.
3. It allows the business to grant credit to customers and still meet its obligations, keeping the business solvent and liquid.
4. It helps the business take advantage of cash discounts and settle its short-term debts promptly, ensuring smooth day-to-day operations.