ExpertMedium2 marksMultiple Choice
ACCA · Question 33 · F. Performance measurement
A heavy machinery manufacturer wants to improve its warehouse inventory management. Instead of comparing itself to other machinery manufacturers, it sends a team to study the inventory management processes of a leading global e-commerce retail giant.
What type of benchmarking is this?
A heavy machinery manufacturer wants to improve its warehouse inventory management. Instead of comparing itself to other machinery manufacturers, it sends a team to study the inventory management processes of a leading global e-commerce retail giant.
What type of benchmarking is this?
Answer options:
A.
Internal benchmarking
B.
Competitive benchmarking
C.
Functional benchmarking
D.
Strategic benchmarking
How to approach this question
Identify that they are looking at a specific *function* (inventory) in a completely different *industry*.
Full Answer
C.Functional benchmarking✓ Correct
Functional benchmarking involves comparing a specific business function or process (like inventory management) against the best-in-class organizations for that function, regardless of what industry they are in.
Common mistakes
Selecting competitive benchmarking, missing the fact that an e-commerce giant is not a direct competitor to a heavy machinery manufacturer.
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