managing stock

Question 1

what is stock

Answer 1

store of raw materials needed for making a product

most busiensses try to minimise stock due to cost involved

Question 2

what type of prodcution does a busienss then need for lot of stock to be needed to be held

Answer 2

flow production needs a large stock of raw materials wheras job prouction often needs no stock of finished goods stored

Question 3

what is buffer stock

Answer 3

the minimum stock level

Question 4

what factors are needed which depeedn on how buffer stock needs to be held

Answer 4

is the product perishable(go out of date)
storage space avaliable
rate at wich stocks are used ip
lead time-time it takes for goods to arrive after ordering them

Question 5

adv of holding buffer stock

Answer 5

needed to avoid running out of stock

beneficial for businesses in mass makret where need to consistently meet customer demand

or risking losing loyal customers

holding large amount of buffer stcok means can achieve business to ourachase economies o fscale as can buy large bulk

Question 6

drawbakc of holding buffer stock

Answer 6

storage costs for a busienss e.g lighting, rent

wastage costs of throwing things away espically if perisahbale

Question 7

lean produciton

Answer 7

where a business holds very little stock

efficinet form of production that focuses on waste minimisation

using as few resources e.g time money as possible to make products at given quality

can involve recycling and reusing materials in house to minimise waste

less waste, firm more efficient, results in lower costs

Question 8

name one mathod of lean prodcution

Answer 8

JIT prodcution (JUst in tiem production)

Question 9

just in time production

Answer 9

aims to reduce waste of materials
having as little stock as possible products avaliable just in tiem for when customers need them

Question 10

adv of JIT prodction

Answer 10

storage costs are reduced therefore chas shlow is imporved as money not tied up in stock

less waste-less out of date or damaged stock lying around

busiens more flexible so can deal with chnages in demand

removing cist of stroagre, can mean can reduced their rpices, competitive advantage

Question 11

dis of JIT production

Answer 11

rely on suppliers, can be hard to organise and can bbe stressful for staff

if supplier is unreliable , then firm may run out of stock and have to stop production

not good for enviroment-transport costs as frequnet deliveries

having smaller deliveries mens cannot purahcse economies of scale by buying in bulk