stock control

Question 1

what are the implications of too much stock

Answer 1

opportunity costs - holding money in stock means it cant be used for anything else
cash flow problems if stock not sold
increase storage costs 
increase finance costs
increased wasted

Question 2

what are the implications of too little stock

Answer 2

lost orders
customer orders might not be able to be met
may run out of resources
loss of reputation

Question 3

what is JIT

Answer 3

Just In Time
stock arrives when needed,
keeps stock levels as low as possible to minimise waste and keeps cost down

Question 4

JIT advantages and disadvantages

Answer 4

ad 
storage space can be used for production
cash is freed up 
cash flow can improve 
less waste

disad
needs careful monitoring
less likely to benefit from economies of scale
if system fails it delays production

Question 5

what is lean production

Answer 5

aims to produce more for less by eliminating waste
focus attention of quality of production
creates higher labour productivity
creates competitive advantage as quality is improved

Question 6

examples of lean production

Answer 6

TQM - total quality management - everyone takes responsibility for quality
kaizen - continuous improvement
JIT
waste minimisation