Stock control Flashcards
What are the three forms stock can be held in?
-raw materials and componants
-work in progress
-finished goods
What is buffer stock?
Stocks held as precaution to cope with unforeseen demand
what is work in progress?
partly finished goods
What is lead time?
The time between placing the order and the delivery of goods
What do Stock control diagrams help visualise?
Lead Time
Re-order level
Buffer level of stock
Re-order Quanitities
what is meant by the re order level
The level of current stock when new orders are placed
What is re order quantity?
the amount of stock ordered when an order is placed
What are some Advantages of the buffer stock method?
-Can meet customer demand
-Quickly respond to increases in demand
-Continue with production even if a problem with stock deliveries
What are some Disadvantages of the buffer stock method?
-Money tied up in holding stock
-Costs associated with stock holding e.g. storage, staff, insurance
-Risk of waste e.g. out of date, damaged or obsolete
what are ways in which there is poor stock control
Holding too much stock
Holding too little stock
Implications of holding too much stock
- expensive storage
-opportunity cost of the money spent
-spoilage cost
-unsold stock
-shrinkage
What are the implications of holding too little stock?
-Not being able to cope with unexpected demand=loss of customers
-Halt production=labour and machine wastage
-Place more orders last min=missing out on economies of scale
What are Lean Production techniques?
Working practices derived from Japan that focus on cutting waste whilst maintaining, or improving, quality
What are the 2 Lean Production techniques?
Just in Time
Kiazen
What are some benefits of JIT?
Less costs in holding inventory
imporives cash flow as money not tied up in stock
reduce waste
more factory space for more productive use
What are some downfalls of JIT?
-damage rep if orders cant be met
-Very reliant on suppliers
-Unexpected orders harder to meet
miss out on economies of scale
Efficient stock control can reduce waste, Leading to a c____ _____?
Competitive Advantage
what is kanban?
a card or an object that acts as a signal to move or provide reosurces in factory
-used in JIT stock control
What can a failure to control stock do
Cause wastage
Ways to minimise waste? (JIT approach)
-refridgertor
-techniques to predict demand=so less stock held
-adjustable price strat
-computer to manage stock control
what is just in time stock management?
japanese approach aims to eliminiate buffer stock
when is it best for JIT to be used?
when the relationship between a business and its supplier is good
competitive advantage from lean production
Lean production (JIT, continious improvement, TQM, cell production) improves:
- input of staff=productivity=reduce labour cost per input
-focus on quality=repeat purchase=image
-few wasted resources> JIt,TQM=reduce fixed costs as less space used
