stock control 4

Question 1

what is buffer stock? and why is it used?

Answer 1

is the minimum stock level

Question 2

pros of buffer stock

Answer 2

• in case of unexpected orders
• suddden increase in demand
• production can continue if theres a supllier delay
• placing fewer supply order = saves costs

Question 3

cons of buffer stock

Answer 3

• cost of storing and securing
• stock could deterioate
• cash flow problems = money tied up in stocks