managing inventory and supply chains Flashcards
what are the three types of stock?
- raw material
- work in progress
- finished goods
define mass customisation
when a firm produces a large quantity of a product but still allows for individual customer preferences to be met
what is outsourcing?
when a firm uses an outside supply to provide goods or services it needs
what is sub contracting?
when a business assigns a task to another business
define offshoring
when a firm moves some or all of its business activities to another country- this can include outsourcing and sub-contracting
explain what part time staff are
staff who are employed by a firm on a permanent basis but work less than 15 hours a week
what are temporary staff?
staff who are employed by a firm for a limited period, who can either be full or part time
what’s an inventory control chart?
a diagram which is used to show the level of inventory over a period of time
what is lead time?
the time taken from a customer ordering a good and the firm delivering it
what are re-order levels?
the inventory level at which an order for more supplies is placed
what’s buffer inventory level?
the minimum level of stock held by a business
define re-order quantity
the number of goods purchased from a supplier on a particular order
what 6 factors influence the choice of supplier?
- quality
- cost
- flexibility
- reliability
- frequency
- payment terms
what are the two approaches to managing their relationships with suppliers?
competitive/non-partnership
collaborative/partnership
give two advantages of a competitive approach?
- low costs
- delaying payments- good cash flow
what are two disadvantages of a competitive approach?
- bad supplier relations and therefore less reliable
- lower priced suppliers may offer poor quality products
two advantages of a collaborative approach are…
- strong relations with suppliers as they work together
- discuss plans to come up with best decisions
two disadvantages of a collaborative approach
- more expensive
- less independence and input- may lose money
what are the four reasons why matching supply and demand can be difficult?
- changes in taste or fashion
- changes in the weather
- marketing activity such as a promotion campaign
- the actions of competitors
what are the three main ways of changing supply to meet changing levels of demand?
- hiring part time and temporary staff
- outsourcing
- producing to order (mass customisation)
what five factors are the main influences on the amount of inventory held?
- storage costs
- financial costs
- cash flow
- wastage
- opportunity cost
what is inventory? (stock)
the items that a firm needs to produce a product or to supply it to customers
