Observation

1. Comments

   (i)A large number of candidates were able to answer question 3(a) very well.

   (ii)Candidates performed averagely in question 3(b) and performed well in 3(c)

   .

   (a) Bonded warehouse is a place where goods whose owners have not paid the required duties are kept on till the duties on them are paid.

    

               (b)       Usefulness of a bonded warehouse in International trade

   (i)It provides the importers with a reasonable time within which he can pay duty on the goods imported;

   (ii)The importers can also complete some processing on the goods while in bond;

   (iii)Effective check on the goods in-bond can be made by the customs authority so as to ascertain import duties, contraband goods etc;

   (iv)It gives the importers an opportunity to arrange for buyers while the goods are in bond;

   (v)Safety of goods imported is also guaranteed;

   (vi)It frees space at the port for other shipments;

   (vii)It helps importers to manage their inventory and cash flow;

   (viii)It improves customer service; and

   (ix)It ensures quality assurance of products.

               (c)        Stock control levels

   (i)Reorder level: This is the level at which a replacement order is made and this will ensure that the order would have arrived before running out of stock.

   (ii)Maximum stock level: This is the level at which stock should not exceed and this will help to prevent overstocking and the cost associated with it.

    

   (iii)Minimum stock level: This is the level below which stock should not fall and this will help to prevent stock-out which leads to production stoppage.

   (iv)Average stock level: This is the average stock held by a firm.