stock control

Question 1

Stock control

Answer 1

The key elements of stock control include:

• Purchase order management
• Inventory tracking
• Monitoring stock levels
• Monitoring the rate at which inventory is sold and replaced
• Keeping accurate records of the value of inventory

Question 2

Stock control charts

Answer 2

They provide visual representations of inventory levels over time and help businesses to identify trends, patterns, and anomalies in their stock levels. Stock control charts can be used to:
- Monitor stock levels
- Detect inventory discrepancies
- Plan for future demand
- Monitor stock turnover
- Identify opportunities for improvement
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Question 3

Just in Time (JIT)

Answer 3

JIT is based on the concept of “pull” production, where each step in the manufacturing process only begins production once the previous step has signaled that it needs more components or materials

Question 4

Kanban

Answer 4

Kanban is a visual system for managing work in a Lean and Just-in-Time (JIT) production environment. It uses columns with sticky notes or cards to represent work items and visually track their progress. The goal of kanban is to minimize waste, reduce lead times, and increase efficiency.

Question 5

Fixed reorder stock level

Answer 5

reorder stock level is a method to determine when to order more inventory, based on a set inventory level and considering factors such as average daily demand, lead time, and safety stock.

Question 6

Economic order quantity

Answer 6

The EOQ formula is:

EOQ = √(2DS/H)

Where:
D = annual demand
S = cost to place an order
H = holding cost per unit of inventory per year

• The EOQ model assumes that demand for the product is constant and that the cost of placing an order is fixed

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Question 7

Electronic methods of stock control

Answer 7

• Barcoding and scanning systems
• Inventory management software
• Enterprise Resource Planning (ERP) systems (all inventory information, allowing organizations to access up-to-date information about their inventory levels, track stock movements, and automate ordering processes.)
  -Radio-Frequency Identification (RFID) systems (use radio waves to automatically identify and track inventory items, providing real-time data about stock levels, location, and movements.)
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Question 8

Buffer stock

Answer 8

A level of inventory that is maintained to provide a cushion against stock shortages or unexpected demand for a product. By maintaining a buffer stock, organizations can reduce the risk of stock shortages, improve customer service levels, and increase their resilience in the face of uncertainty.

Question 9

Reorder level and quantities

Answer 9

Reorder level is the inventory level at which an order should be placed to replenish the stock. It is determined by the lead time required to receive the new stock, the rate of usage of the product, and the desired level of safety stock.

Reorder quantity is the amount of inventory that should be ordered when the reorder level is reached. It is calculated based on the usage rate of the product and the lead time required to receive the new stock, and takes into account factors such as minimum order quantities, ordering costs, and the available storage space.

Question 10

Lead time

Answer 10

the amount of time that elapses between the placement of an order for inventory and the receipt of that inventory.

It can be influenced by a variety of factors, including the distance between the supplier and the customer, the shipping method used, the reliability of the supplier, and the time required for the supplier to process and fulfill the order.

Question 11

evaluate the impact and importance of holding and controlling stock to a business and its stakeholders

Answer 11

Business:
- Cost savings
- Improved customer satisfaction
- Increased efficiency
- Better decision making

Stakeholders:
- Customers: improved availability of products, reliable delivery times, and reduced risk of stock shortages.
- Suppliers: Improved forecasting, reduced stock shortages, and better collaboration with the business.
- Employees: Improved stock management can reduce the stress and workload associated with managing inventory.
- Investors: Increase the value of the business, making it a more attractive investment opportunity.

Question 12

evaluate the relationship between stock control and methods of production in a business

Answer 12

• inventory control and production planning
• Improved quality control
• Reduced lead times
• Increased production efficiency
• Better management of production bottlenecks