3.4.5 Flashcards
Define inventory
Good source stock that a company holds
What are the main factors to consider when managing inventory on the supply chain?
- Speed
- quality
- Dependability
- reputation
- Flexibility
- customisation
What are the issues when managing inventory?
- Meeting demand
- Risk
- Costly
What factors most businesses consider when choosing a supplier?
- The cost and quality of materials
- Dependability
- Ethical practices
- Availability of trade credit
- Level of service
- Flexibility
- Speed
Define lead time
How long it takes from the order being placed with the supplier to it arriving
Define Buffer inventory
The minimum amount of inventory of business wants to hold
Define re-order quantities
The quantity of an item a business will order at a given time
Define re-order level
Once stock gets to a specific level The business will order new stock from the supplier, that should be delivered when the business is at their minimum stock.
What things must a business consider when using inventory control charts?
- Unexpected chages in demand
- Long lead times which make inventory planning more difficult
- Suppliers who failed to deliver
- The right buffer stock levels can affect efficiency and cash flow
- Human or computer error when re-ordering stock
How can the supply chain be effectively managed?
- long-term v short term agreements with supplier
- contracts with suppliers
- Deciding what to outsource and what to do
- Vertical integration, taking control of the supply chain itself?
What ways can you manage supply to meet demand?
- Employ flexible workforce
- Queuing system during periods of high demand
- Produce to order
- Outsourcing production to other businesses when demand is high
What is the supply chain?
The supply chain refers to a network of providers involved in the process of getting the products to the customer.
