2.3.2 Working With Suppliers

Question 1

What are the advantages of JIT inventory management?

Answer 1

lower inventory costs, reduced waste, and improved cash flow.

Question 2

What are the disadvantages of JIT inventory management?

Answer 2

vulnerability to supply chain disruptions and the need for highly reliable suppliers.

Question 3

What is meant by ‘lead time’ in the context of suppliers?

Answer 3

the amount of time between placing an order with a supplier and receiving the goods or services.

Question 4

What are the advantages of having short lead times?

Answer 4

Advantages of short lead times include reduced inventory costs, increased flexibility, and the ability to respond quickly to market changes.

Question 5

What is the disadvantage of relying on suppliers with short lead times?

Answer 5

A disadvantage is that it may limit the business to local suppliers, potentially increasing costs or reducing the availability of certain materials.

Question 6

What is the advantage of having multiple suppliers?

Answer 6

reduces dependency on a single supplier, minimizing risk if one supplier fails to deliver.

Question 7

What is the role of suppliers in a business?

Answer 7

Suppliers provide the raw materials, components, or services that businesses need to produce their own goods or services.