3.4.5 Managing inventory and supply chains

Question 1

11 how do you match inventory to meet demand

Answer 1

important aspect of operation
demand stable industries, supply is predictable
demand can vary daily, weekly
managers use several methods to monitor this

Question 2

11 advantages of producing to order

Answer 2

supply exact customer wishes
reduce inventory holding costs
potentially higher prices
production planning is easier
target mass markets

Question 3

11 disadvantages of producing to order

Answer 3

fluctuations in produce levels
higher costs
inability to advantage sudden interest in product
uncertainty about production levels

Question 4

11 advantages of temporary staff

Answer 4

efficient way to lower costs
respond to demand more easily
motivated employees
larger pool of people
opportunity to retain value

Question 5

11 disadvantages of temporary staff

Answer 5

higher costs of training and admin
less loyalty

Question 6

11 advantages of outsourcing

Answer 6

react to demand more quickly
efficient in specific activities
focus on core business
non-standard orders can be achieved too

Question 7

11 disadvantages of outsourcing

Answer 7

quality of product is not under firms control
excess outsourcing erodes operations
cost should be considered
may require transfer of confidential info

Question 8

11 what factors affect outsourcing

Answer 8

available capacity
expertise
quality
nature of demand
cost, risk level
profit impact

Question 9

11 what is inventory and stock control

Answer 9

business attitude to risk
importance of speed of response
speed of change within market
nature of product

Question 10

11 what is buffer level of inventory

Answer 10

stock held to cope with unforeseen circumstances
reaches minimum level it has buffer too
a just-in-time has zero buffer

Question 11

11 advantages of buffer stock

Answer 11

cope with demand surges
higher customer satisfaction
suppliers delays are not impacting
economies of scale
lead time is shorter

Question 12

11 disadvantages of buffer stock

Answer 12

increased storage costs
higher risk of damage, theft
risk of waste
no value in stock holding

Question 13

11 what is re-order level equation?

Answer 13

(lead time x usage) + buffer stock

Question 14

12 how do you improve operational performance

Answer 14

speed of response
dependability
flexibility

Question 15

12 how does speed of response improve operational performance

Answer 15

can assess activities simultaneously
increase speed by investing in technology
used as an competitive advantage
speed is not always a main objective though

Question 16

12 how does dependability improve operational performance

Answer 16

starts and finishes at stated times
important in travel sector
may require ne processes, investment and training

Question 17

12 how does flexibility improve operational performance

Answer 17

customers have more choice
technological developments improve this
large scale produce while adapting individual items is called mass customisation
higher customer satisfaction, but higher costs of production too

Question 18

12 how do you match supply with demand

Answer 18

employ flexible workforce
use queuing systems, waiting systems
outsourcing to meet high levels of orders
increase price to reduce demand
accept orders to produce for others when demand is low
produce to order

Question 19

12 what is B2B

Answer 19

business to business
suppliers who give products to other business

Question 20

12 what is the supply chain

Answer 20

all the ressource providers throughout every stage of operations

Question 21

12 what is inventory

Answer 21

the number of goods held in stock including raw materials, work in progress and finished goods

Question 22

12 what is inventory control charts

Answer 22

gives a visual representation of lead times, re-order level
used to control and monitor the flow of stock

Question 23

12 what is lead times

Answer 23

time it takes between placing an order and it arriving
measured on horizontal axis of inventory control chart, as distance from re-order level to minimum inventory level

Question 24

12 what is reorder level

Answer 24

level of inventory which triggers an order, may be done automatically by a computerised system
be determined by lead time and minimum inventory level

Question 25

13 what will the business do before choosing a supplier

Answer 25

businesses set criteria for the selection process, identifying what the most important factors for them

Question 26

13 what influences choice of supplier

Answer 26

prirce
speed of delivery
quality
location of suppliers
reliability
reputation
flexibility

Question 27

13 why is price an important factor

Answer 27

keeps unit cost low
either pass savings onto customer in lower prices or higher profit margins
no sub-standard quality
value for money