Resource management in the car industry.

Question 1

What is the role of buffer stock in the UK car dealer industry?

Answer 1

Buffer stocks can be held in at JIT System because it holds just a small amount of stock as a buffer against:

• Late deliveries of inventory, raw materials
• Fluctuations in customer demand

Question 2

What are the factors that will impact the number of car dealer carriers will include:

Answer 2

• Lead time
• Expected demand
• Space to store cars

Question 3

Why would a car dealer want to hold buffer stock?

Answer 3

• To reduce the risk of not being able to meet the demand.
• To stop customers from going elsewhere.
• Could also add to prevent negative reviews on social media.

Question 4

How will holding large buffer stocks impact a car manufacturing industry?

Answer 4

• Buffer stocks are held in case of a reduction in supply.
• If the business decides to hold large profit stocks the car company will need large warehouses to store all of the parts needed to make these models of cars in their current range.