Managing inventory and supply chains

Question 1

Give examplees of operational objectives

Answer 1

Flexibility, speed of response, dependability

Question 2

What are ways you can improve the supply chain?

Answer 2

Improving flexibility, speed and dependability

Question 3

What is the impact of flexibilty on the supply chain?

Answer 3

Flexibility is important because it allows the business to respond to changes in demand with little notice

Question 4

How can a business improve its flexibility?

Answer 4

Using mass customisation - Approach to production which involves products being made in mass to achieve lower unit costs, with a final process which allows for customisation
Mass customisation allows a business to respond to customer needs through customising products requested by customers

Question 5

Why is speed important as an operational objective?

Answer 5

Ability to meet cutsoemrs’ expectations in terms of the time taken to produce and distribute a product can contribute to customer satisfaction

Question 6

How can a business improve its speed of response?

Answer 6

Focussing on efficiency during the production process as increased efficiency and productivity will allow businesses to produce and therefore distribute products more quickly

Question 7

Why is the operational objective of dependability important?

Question 8

How can a business improve its dependability?

Answer 8

Ensuring it uses reliable suppliers that it can trust

Question 9

How can demand relate to profitability?

Answer 9

Business should be able to meet customer demand to maximise profitability
Meeting demand can involve increasing supply

Question 10

Impact of outsourcing

Answer 10

Supply can be increased through outstanding work which increases output

Question 11

Impact of hiring flexible workers

Answer 11

Supply can be increased using part-time and temporary workers who can support the business flexibly when demand increases
Many farms hire strawberry pickers as seasonal workers

Question 12

Impact of minimising waste

Answer 12

Supply can be increased through using a producing to order approach which minimises waste and ensure the availability of raw materials to create products in demand

Question 13

Example of hiring flexible workers

Answer 13

Many farms hire strawberry pickers as seasonal workers. Many of these are migrant workers from Europe.

Question 14

What is an inventory?

Answer 14

List of all the stock that is held by a business

Question 15

Influences on amount of inventory held

Answer 15

Inventory control charts can be used to show a business its maxmum stock level, re-order level, lead time and buffer stock

Question 16

Inventory control diagram

Answer 16

Shows maximum stock level a business is willing to operate at
Shows re-order level which is the point at which further stock is ordered
Shows buffer stock which is the spare stoc ka business holds in case there is an unexpected increase in demand
Shows the lead time which is the time taken for the stock to arrive after it is ordered

Question 17

What is outsourcing?

Answer 17

When a business uses another business to make part of its product or provide part of its service

Question 18

Advantages of outsourcing

Answer 18

Can provide cost savings because a third-party business may be able to create or produce a product or service at a lower cost than the original business
Supplier may be a specialist, with greater experience and better equipment
Speed of response can be set as requirement of the outsourcing contract
Suppliers likely to have greater capacity and flexibility than in-house

Question 19

Disadvantages of outsourcing

Answer 19

Can lead to quality problems if the business that wins the outsourcing contract does not uphold the same quality standards
Supplier may have to balance conflicting demands from other customers