Edexcel-Stock Control 2.4

Question 1

Stock control Charts

Answer 1

Shows how business stock levels change over time

Question 2

Buffer

Answer 2

Minimum

Question 3

Reorder level

Answer 3

Quantity to which new stock needs to be ordered.

Question 4

Lead time

Answer 4

Time taken for supplier to deliver item once order has been placed.

Question 5

Reorder quantity

Answer 5

Size of order to restock.

Question 6

Too much stock leads too

Answer 6

Storage costs
Opportunity cost as money tied up in stocks could be used elsewhere
Cash flow problems if takes a while to sell all stocks

Question 7

Too few stocks lead too

Answer 7

Lost orders
Lost reputation from letting down customers
Productivity and efficiency

Question 8

What does lean production do?

Answer 8

Aims to minimise waste
Gain competitive advantage

Question 9

Just in time

Answer 9

When stocks arrive when needed.

Question 10

Just in time advantages

Answer 10

Reduced stock holding costs
More reactive to customer needs

Question 11

Just in time disadvantages

Answer 11

Can’t benefit from economies of scale
Late deliveries become a problem