2.4.3 Stock Control Flashcards
1
Q
What is the ‘maximum level’ on a stock control graph
A
- The maximum amount of stock a business can or wants to hold
2
Q
What is the re order level
A
- Acts as a trigger point for when the next order of stock should be put in
3
Q
What is the lead time
A
Amount of time between placing the order and receiving the stock
4
Q
Explain buffer stocks
A
- Minimum amount of product a business wants to hold.
5
Q
What are some implications of poor stock control
A
- Overstocking may lead to increased storage costs
- Understocking, may lead to inability to meet demand
6
Q
What are some benefits of low stock level
A
- Lower stock holding costs e.g storage
- Less cash tied up in statuary assets
7
Q
What are some advantages of high stock level
A
- Better able to handle unexpected orders
- Potential for lower unit costs due to bulk buying
8
Q
What is JIT management
A
Ordering stock only when needed for production.
9
Q
What are some advantages of JIT management
A
- Reduces storage costs and waste
- Improves cash flow
10
Q
What are some cons of JIT management
A
- High reliance on suppliers
- May not be able to meet sudden demand
11
Q
What is waste minimisation
A
Businesses aim to reduce unnecessary waste to improve efficiency
12
Q
How can a competitive advantage be acheived via adopting lean production
A
- Lower costs can offer lower prices or higher profits
