2.4.3 Stock control Flashcards
1
Q
Stock Def.
A
current asset held by business to help meet the demand of customers
2
Q
Forms of stock.
A
- raw materials
- work in progress
- finished products
3
Q
Lead time Def.
A
time it takes between placing an order and receiving delivery
4
Q
Re-order level Def.
A
level of stock which triggers an order, this may be done automatically by a computerised system
5
Q
Buffer level Def.
A
stock held by a business to cope with unforeseen circumstance
6
Q
Re-order quantities Def.
A
The quantity of stock that is ordered when the re-order level is reached
7
Q
Buffer stock Advantages.
A
- can meet customer demand
- quickly responds to increases in demand
- can be solved with stock rotation
8
Q
Buffer stock Disadvantages.
A
- money tied up in holding stock
- costs associated in holding stock (storage)
- risk of waste
9
Q
Just-In-Time (JIT) Def.
A
technique used to minimise stock holdings at each stage of the production process. ordering stock only when needed
10
Q
Just-In-Time (JIT) Advantages.
A
- less costs in holding inventory
- less working capital required
- less obsolete or ruined inventory
11
Q
Just-In-Time (JIT) Disadvantages.
A
- very reliant on suppliers
- unexpected orders harder to meet
- delays in deliveries cause big problems
