A-level Business Studies Lesson 27 (3.4.5 L2)

Question 1

Inventories

Answer 1

Items that firms need to produce for, or supply to, customers.

Question 2

Inventory control chart

Answer 2

A diagram that is used to register levels of inventory over a period of time.

Question 3

Buffer inventory level

Answer 3

The minimum level of inventory targeted by a business. The buffer level of inventory should be enough to cover for sudden increases in demand or unexpected problems in getting infantries, such as a transport problem with the supplier.

Question 4

Re-order level

Answer 4

The inventory level at which an order is placed for new inventory.

Question 5

Re-order quantity

Answer 5

The actual number of products purchased from the supplier in a particular order.

Question 6

Lead time

Answer 6

The time taken for a customer request to be fulfilled. In the case of inventory control. The lead time is how long the supplier takes to deliver an item once an order has been placed.

Question 7

Inventory wastage

Answer 7

A measure of the loss of inventory within a business.

Question 8

Inventory rotation

Answer 8

Using old inventory before new inventory to make sure the inventory wastage is kept to a minimum.

Question 9

Supplier

Answer 9

An organisation that provides a business with the materials it needs in order to carry out its business activities.

Question 10

Supply chain

Answer 10

A network of sellers of raw materials, manufacturers that transform those materials into products, and wholesalers and retailers who get those products to customers.

Question 11

Supply chain management

Answer 11

The organisation of these activities to create value for the customer and profit for the businesses involved in supplying the products.