3.2 the role of procurement

Question 1

stock

Answer 1

every day supplies

Question 2

opportunity cost

Answer 2

something that is given up in order to do something else

Question 3

what happens to stock that is unsold?

Answer 3

reduce cost to encourage customers to buy

Question 4

just in case stock control

Answer 4

hold enough stock for any possible increase in sales

Question 5

benefit of jic stock control? -3

Answer 5

• buy in bulk: less cost of product, less delivery cost = economies of scale
• lower risk if problem with supplier
• sudden increase in demands = capable of selling

Question 6

drawbacks of jic stock control -2

Answer 6

• high cost for storage
• if not sold enough = stock waste

Question 7

jit advantages -2

Answer 7

• doesnt need space for stock - less cost
• less danger of theft

Question 8

jit drawbacks -3

Answer 8

• buy small quantities - cost higher in bulk
• more transport cost - more deliveries
• risk if difficulties with suppliers

Question 9

why is choosing the right supplier important?-3

Answer 9

• delivery on time
• reliability
• good quality products

Question 10

procurement

Answer 10

purchase of stock - large business costs

Question 11

supply chain

Answer 11

refers to all business,people,and activities in production process

Question 12

movement of goods, services,and money throughout the production process/ensuring everything is where it should be

Answer 12

movement of goods, services,and money throughout the production process/ensuring everything is where it should be

Question 13

supplier factors to consider-5

Answer 13

• cost and quality
• range of products and speed
• flexibility
• reliability
• payment and contract terms

Question 14

trade offs

Answer 14

choosing the right supplier means trading off characteristics required