2.4.3 Stock Control Flashcards
What is Stock?
Stock is a current asset held by business to help meet the demand of customers
What are the three forms stock can be held in?
Raw materials
Work in progress
Finished products
What do Stock control diagramshelp visualise?
Lead Time
Re-order level
Buffer level of stock
Re-order Quanitities
What is Buffer stock?
Stock held in case there is a problem with delivery of new stock or a sudden increase in demand
What is lead time?
It is the time from placing the order to getting the delivery
What are some Advantages of the buffer stock method?
Can meet customer demand
Quickly respond to increases in demand
Continue with production even if a problem with stock deliveries
What are some Disadvantages of the buffer stock method?
Money tied up in holding stock
Costs associated with stock holding e.g. storage, staff, insurance
Risk of waste e.g. out of date, damaged or obsolete
What are Lean Production techniques?
Working practices derived from Japan that focus on cutting waste whilst maintaining, or improving, quality
What are the 2 Lean Production techniques?
Just in Time
Kiazen
What are some benefits of JIT?
Less costs in holding inventory
Less working capital required
Less obsolete or ruined inventory
Lower associated costs e.g. security and insurance Avoids having unsold stock
What are some downfalls of JIT?
Little room for error
Very reliant on suppliers
Unexpected orders harder to meet
Efficient stock control can reduce waste, Leading to a c____ _____?
Competitive Advantage
