2.3.2 Working With Suppliers

Question 1

What do Manufactures and Retailers need to make sure there is plenty of?

Answer 1

• They Need to make sure there is enough good on shelves.

Question 2

Name 3 risks of ordering lots of stock?

Answer 2

• 1) Increases insurance costs.
• 2) Having too sell unwanted stock at lower prices.
• 3) A Large amount of money is tied up with stock.

Question 3

Name 2 Types of Stock management?

Answer 3

• 1) Just in Time (JIT)
• 2) Buffer Stock

Question 4

Write a Definition Of JIT And give a Example of Which companies would use this type of stock management?

Answer 4

• JIT is running the business with so little stock that new suppliers have to arrive just in time before they run out.
• For Example: Sofa and Car companies.

Question 5

Write a Definition of Buffer Stock and what how is it presented?

Answer 5

• Buffer Stock is the Minimum stock level held at all times to avoid running out.
• Its Presented in a Bar- Gate stock graph.

Question 6

Give 1 Benefit of Just in time Stock Management ( 3 Marker)?

Answer 6

One Benefit is that it can Lower storage costs (P) This is because less space is needed to hold buky material (S) This Leads to Business being able to charge a lower price (S) Therefore making them more competitive in the market (S)

Question 7

Give 1 Drawback of Just in time Stock Management ( 3 Marker)?

Answer 7

One Drawback is that business will be reliant on a good relationship being formed with suppliers of raw materials (P) This is because if they have a poor relationship stock of raw materials won’t arrive on time (S) This leads to them not be able to meet customer deadline (S)

Question 8

Write the Definition of Economies of Scale?

Answer 8

• Economies of Scale is when a business buys in bulk from a supplier and they get it for cheaper.

Question 9

What does buffer stock Level also mean and Where is it Located on a bar-gate stock graph?

Answer 9

• It also Means the Minimum stock Level.
• The Buffer Stock Level Is the Lowest Point on a bar-gate stock graph.

Question 10

Write a Definition of Maximum Stock Level and Where is it Located on a bar-gate stock graph?

Answer 10

• The maximum stock level is the largest amount of stock a business can store on site.
• The Maximum stock level Is The Highest point on bar-gate stock graph.

Question 11

Write a Definition of lead time and Where is it Located on a bar-gate stock graph?

Answer 11

• The lead time is how long it takes stock to arrive.
• The lead time is the gap between the lines that go up and down.

Question 12

Write a Definition of Re- Order Level and Where is it Located on a bar-gate stock graph?

Answer 12

• The Re-Order Level is how much New stock the business Needs to order Before it Runs out.
• The Reorder Level is the Line That goes Straight through the Bar gate stock graph.

Question 13

Write a Definition of a Supplier?

Answer 13

• A Supplier is a Business or Individual that provides goods and services to a business.

Question 14

Name 3 Ways why suppliers are important?

Answer 14

• 1) For a Business to meet the needs and wants of customers.
• 2) Suppliers Determine Many of the costs of a business.
• 3) Suppliers are closely linked to product quality.

Question 15

Write a Definition of Procurement?

Answer 15

• Procurement is the sourcing,Purchasing,Receiving And inspecting all of the goods and services your business needs to operate.

Question 16

Write a Definition of Procurement in basic terms?

Answer 16

• Procurement is how to choose the right supplier.

Question 17

Name 3 things that Procurement Involves?

Answer 17

• 1) Deciding what is needed
• 2) Terms of Payment.
• 3) Selecting Suppliers.

Question 18

What is the Ultimate objective of Procurement?

Answer 18

• The ultimate objective of procurement is securing the right place from the right supplier at the right price.

Question 19

Name the 5 Factors that Establishes a Positive Relationship with the Supplier?

Answer 19

• 1) Quality.
• 2) Delivery.
• 3) Availability.
• 4) Cost.
• 5) Trust.

Question 20

Write the Definition of Logistics?

Answer 20

• Logistics is the process of getting goods or services from where they are made to where they are needed.

Question 21

Name the 3 Most important factors to insure a positive relationship formed with suppliers?

Answer 21

• 1) Cost
• 2) Quality
• 3) Delivery

Question 22

Why is cost a important factor to ensure a positive relationship with suppliers?

Answer 22

• Value for money is crucial, but the lowest price doesn’t always mean the best value—it depends on quality and customer expectations. However, lower costs can allow businesses to offer competitive prices to attract customers.

Question 23

Why is Quality a Important factor to ensure a positive reputation with suppliers?

Answer 23

• Meeting customers’ expected quality standards ensures satisfaction, builds a positive reputation, and encourages repeat and loyal customers. Quality doesn’t have to be the highest but must meet customer needs.

Question 24

Why is Delivery a Important factor to ensure a positive reputation with suppliers?

Answer 24

• Cost of Transporting the suppliers may be important.because if suppliers are far transportation costs can increases This is why business may want to change to a effective local supplier.

Question 25

Write a Definition of a Supply Chain?

Answer 25

• A Supply Chain is a Network of Organisations That get Products to Customers.

Question 26

What Does a Supply chain ensure?

Answer 26

• A Supply chain ensures that the right quantity of goods are in the right place at the right time.

Question 27

Give 1 Benefit of a effective supply chain management ( 3 Marker)?

Answer 27

One Benefit of an effective supply chain is that it can lower unit costs (P) This is because prices can be negotiated with suppliers to ensure that a business receives value for money (S) Therefore any cost savings can be passed onto customers in the form of lower prices (S) As a result the Business can enjoy increased profit margins which could lead to future improvements in efficiency (S)