Operations- inventory control

Question 1

what is operations

Answer 1

the production of goods and services using raw materials

Question 2

what would be taken into consideration when choosing a supplier

Answer 2

quality of the raw materials
the price charged
can the quantity required be met
how far away the supplier located
how long delievery takes
the reliability of the supplier

Question 3

Describe inventory control

Answer 3

ensuring enough inventory is available for production to take place without distrubtion

Question 4

describe max level

Answer 4

the highest amount of inventory that can be held for the lowest cost

Question 5

describe min level

Answer 5

the smallest amount of inventory that can be held
- avoids a shortage and production being disturbed

Question 6

describe reorder level

Answer 6

when an order for raw materials should be placed

Question 7

describe reorder quantity

Answer 7

the amoutn ordered at reorder level
- should arrive when the min level is reached

Question 8

describe lead time

Answer 8

the time between goods being ordered and them arriving

Question 9

describe buffer stock

Answer 9

inventory held for emergencies
- the stock held below min level

Question 10

describe inventory management systom benefits

Answer 10

avoid inventory deteriorating
ensure inventory is available when needed
avoid production stopping
avoid overstocking
avoid customers not receiving order in time

Question 11

describe the consequences of holding too little inventory

Answer 11

production may stop
employees paid for doing nothing
custoemrs will receive their orders late
- poor reputation
- lose custoemrs
-lose profit/sales

Question 12

describe the conseuqneces of holding too much inventory

Answer 12

increased costs
- security
- electricity
- storage
money tied up in inventory
increased chance of theft
increased chance of deterioration
fashions may change and you will be left with unsellable inventory

Question 13

describe just in time inventory control

Answer 13

when raw materials are ordered just in time for them to be used in production
production does not start until an order has been placed by a customer

Question 14

describe the adv of just in time inventory contorl

Answer 14

money si not tied up in inventory
reduced wastage
less chance of being left with unsellable inventory
improved cash flow
less storage costs
most up to date inventory

Question 15

describe the dis of just in time inventory control

Answer 15

high reliance on supplier
little time for quality checks
transport problems
no economies of scale
lack of supplies means no production
increase trasnport costs

Question 16

describe computerised inventory control ( EPOS)

Answer 16

EPOS is used to contorl inventory electronically
- inventory is scanned when received
- inventory is scanned out when sold
epos can reorder inventory automatically when the reorder level is reached by sending an email
goods can be ordered over the internet
manual inventory check must still be carried out atleast once a year

Question 17

describe warehousing

Answer 17

where the finished goods are held until they are distributed

Question 18

describe centralised inventory storage

Answer 18

when inventory is stored in a dedicated central storage area
inventory is then distributed to each branch as required

Question 19

describe centralised adv

Answer 19

better security with specialist staff- less theft
standardised procedures for issuing inventory
economies of scale are achieved as one large order is placed
can cost less for storage

Question 20

describe centralised inventory storage dis

Answer 20

cost fo specialist staff
dedicated area generates no income
costly to maintain
time wasted distributing inventory to branches- more chance of damage

Question 21

describe decentralised inventory storage

Answer 21

when inventory is stored in a room within the retail outlet

Question 22

describe decentralised inventory storage adv

Answer 22

inventory is available when needed
orders are placed for what is sued
quick turnover- less likely to go out of date
orders reflect local tastes

Question 23

describe decentralised inventory storage dis

Answer 23

spack taken up in each branch
increased chance of theft due to less security
no economies of scale are achieved
all branches will have different procedures for ordering and storing inventory
security is mroe difficult and staff are not specialised