10.1

Question 1

push system

Answer 1

relies on market demand and forcasting to dictate production levels

Question 2

pull system

Answer 2

uses current customer demand to dictate what and when will be produced

Question 3

JIT

Answer 3

strategy where materials and components are delivered only when needed –> low storage costs but accurate planning and reliable suppliers needed

Question 4

JIC

Answer 4

strategy where excess materials and components are kept in case of unexpected disruption/higher demand, –> ensures availability but increases storage costs

Question 5

advantages of JIT

Answer 5

low storage costs

no capital investment into unused raw materials etc

increased efficiency

Question 6

disadvantages of JIT

Answer 6

if purchasing in small quantities no economies of scale

faulty batch will slow down production process

Question 7

advantages of JIC

Answer 7

manufacturers have goods in stock for unforseen circumstances

can respond quickly to higher demand

economies of scale

less transport costs

Question 8

disadvantages of JIC

Answer 8

cost of rent

large initial investment needed

certain components might spoil over time => waste

trends may change and stock will not be needed