2.4.3 Stock control Flashcards
1
Q
define stock control
A
the control of flow of stock in a business it concerns the ordering and management of raw materials, components, work in progress, finished goods
2
Q
define buffer stock
A
stock held in case of an unforeseen rise in demand/problems with supply, ensuring production is not stopped and customers kept happy
3
Q
why cant some businesses hold buffer stock
A
due to perishability
4
Q
pro’s
A
- easily respond to changes in demand
- if suppliers cannot order on time, production not affected
5
Q
con’s
A
- high cost of storage
- ties up working capital
- stock out costs
- less customers good will
- loss of sales revenue
- damage to reputation
disruption to production
6
Q
define stock out costs
A
the costs of not having stock when needed
