3:2 Inventory Control

Question 1

What is inventory control?

Answer 1

A factory will have to control the levels of two types of inventory- raw materials & the finished product.

Question 2

Good inventory control will:

Bad inventory control will:

Answer 2

Good:
*Improve efficiency because manufacturing will be constant
* Enables the business to always meet demands
* Give the business a competitive edge

Bad:
* The consumer demander can’t be met
* Requires extra warehouse space
* Lose business & goodwill

Question 3

Describe the four types of inventory control.

Answer 3

Minimum: Works out the minimum amount in which the business can function. Inventory is reordered when the minimum is met.

Batch: Calculates the value of inventory held and available for manufacturing.

First in First Out: Based on selling the oldest inventory first.

Just in Time: Products are manufactured just in time for them to be sold.

Question 4

Advantages and disadvantages of Just in Time

Answer 4

• Capital is used very effectively
• Warehousing isn’t needed for storage
• If errors occur, not a lot of products are affected
• Business is dependent on efficiency
• Manufacturing could be halted if the wrong orders are delivered