Certified Supply Chain Professional (CSCP) Practice Exam

How does a business earn more revenue than expenses?

1. By increasing operational costs

2. Through effective sales strategies

3. By reducing employee salaries

4. By decreasing product availability

The correct answer is: Through effective sales strategies

A business earns more revenue than expenses primarily through effective sales strategies. This involves implementing various approaches to attract customers, close sales, and enhance market reach, which ultimately increases the income generated from sales. Successful sales strategies can include targeted marketing campaigns, promotions, improving customer relationships, and optimizing the sales process, all of which contribute to boosting revenue. Increasing operational costs or reducing employee salaries does not necessarily lead to an increase in revenue. In fact, increasing operational costs could lead to higher expenses without a corresponding increase in sales, thus jeopardizing profitability. Similarly, decreasing product availability could limit sales opportunities, as fewer products available may lead to lost sales and dissatisfied customers. Reducing employee salaries can negatively affect morale and productivity, which can also hinder the business's ability to generate revenue. Therefore, implementing effective sales strategies is crucial for ensuring that revenue exceeds expenses, leading to a profitable operation.