2.4.3 Stock control

Question 1

Draw a stock control diagram

Question 2

What happens if a firm has poor stock control? (too much stock)

Answer 2

Running inefficiently

Question 3

What happens if a firm has poor stock control? (not enough stock)

Answer 3

Unable to satisfy consumer demand

Question 4

What are 3 pros of holding buffer stock?

Answer 4

• Economies of scale
• Ability to satisfy demand
• Production flow - steady flow

Question 5

What are 3 cons of holding buffer stock?

Answer 5

• Opportunity costs - cash used somewhere else?
• Cost of storage
• Cost of insurance incase any stolen/ damaged

Question 6

What is lean production?

Answer 6

Producing less using more

Question 7

What are 2 pros of lean production?

Answer 7

• Productivity
• Motivation

Question 8

What are two cons of lean production?

Answer 8

• Difficult to meet unexpected demand spikes
• Loss of discounts for bulk

Question 9

How can a business use technology to reduce waste? 1 Example

Answer 9

Curve overproduction of goods

Question 10

What is just in time (JIT) management of stock?

Answer 10

Produce stock only to specific orders

Question 11

What are 2 pros to JIT management?

Answer 11

• Less waste
• Saves storage costs

Question 12

What are 2 cons to JIT management?

Answer 12

• Requires excellent relationships with suppliers
• No economies of scale

Question 13

What are 3 types of stock?

Answer 13

• Raw materials
• WIP (Work in progress)
• Finished products ready to sell

Question 14

What is stock (inventory)?

Answer 14

The value of products kept by a business at any one time