Stock Control - 2.4.3

Question 1

What is stock?

Answer 1

inventories that are brought to make products or finished goods to sell

Question 2

3 varieties of stock?

Answer 2

raw materials
work in progress
finished goods

Question 3

What is stock control?

Answer 3

keeping stock levels down to reduce costs

Question 4

7 factors that influence stock control?

Answer 4

demand 
stockpile goods
cost of stock holding 
type of stock
lead time 
external factors

Question 5

What does the stock control diagram show?

Answer 5

re-order quantity

re-order level

Question 6

Define the re-order quantity?

Answer 6

amount of stock when new order is placed

Question 7

Define the re-order level?

Answer 7

level of stock at current time when order is placed

Question 8

What is buffer stock?

Answer 8

emergency stock for when increase in demand or break in supply

Question 9

3 implications of poor stock control?

Answer 9

storage costs
opportunity cost
spoliage cost

Question 10

3 reasons why firms cant have too little stock?

Answer 10

cannot cope with unexpected increase in demand
if deliveries are delayed they may lose customers
may have to place more orders = higher cost

Question 11

What is JIT?

Answer 11

When stock is delivered just in time for when it is needed

Question 12

3 adv of JIT?

Answer 12

improves cash flow
reduces waste
gives workers more responsibility

Question 13

3 disadv of JIT?

Answer 13

Trust is placed to suppliers
increased ordering
bulk buying benefits cant be used