Stock Control Flashcards
What is stock?
- raw materials
- work in progress
- finished goods
What is work in progress?
Stock that has already been used in the production process but is not yet a finished product, componants that are partly assembled
What are raw materials?
Materials to make product, no production undergone yet, e.g wood
What is the finished good?
The completed product waiting to be delivered to the consumer
Benefits of holding stock:
- Satisfy demand
- Coping with fluctuations in demand
- Buffer stock in case of late deliveries
- Cost savings due to EOS
Drawbacks of holding stock:
- Storage costs
- Opportunity costs - prevents alternative expenditure
- Depreciation
- Security
- Adminstrative costs - e.g transport
What is the buffer stock level?
The difference between the minimum stock level and holding no stock
What is the minimum stock level?
Determined by level of sales, amount of time taken to deliver new stock, history of unforeseen circumstances
What is the maximum stock level?
Determined by storage capacity, season, product, cost of storage, level of sales, degree of competition and timing of marketing campaigns
What is the reorder level?
Determined by amount of time taken from reorder to actual delivery, known as lead time, how near supplier is to factory, sales records to date
What is fixed time reordering?
Reordering at a given time, once a week
What is economic order level?
The result of attempting to balance the cost of having too much stock and the amount of stock ordered as it can be purchased at a lower price.
What is lead time?
The time taken from ordering stock to its arrival
What is LIFO and FIFO?
Last in First Out - short shelf life
First in First Out - long shelf life
What is epos?
Electronic point of sale - ensuring stock levels and reordering is done efficiently
