Storage and warehousing

Question 1

What is centralised storage?

Answer 1

This is when items are stored in one large location e.g. a warehouse

Question 2

What are advantages of centralised storage?

Answer 2

• Speeds up stock handling time and security is improved due to specialised staff
• Economies of scale achieved e.g. bulk buying
• It is standardised to have consistant procedures so staff know what to do
• It may be cheaper to store inventory in one large warehouse than many small ones
• Located close to infrastructure e.g. motorways

Question 3

What are disdavantages of centralsied storage?

Answer 3

• Inventory has to be delivered from warehouses to departments causing delays
• Specialist staff required to maintain inventory so high costs
• Specialist equipment required
• Inventory usage levels and needs are unclear as lots of communications required with different divisions
• Has been declining due to more efficient JIT

Question 4

What is decentrilised storage?

Answer 4

This invoves storing inventory close to where it is needed for production or sales

Question 5

What are advantages of decentrilised storage?

Answer 5

• Inventory is alwasy close at hand when needd
• More responsive to local needs
• Inventory usage reflects production
• Smaller amounts of inventory rusults in no overstocking

Question 6

What are disadvantages of decentrilised storage?

Answer 6

• Could lead to theft or wastage as security isnt as good as centrilised
• Lack of specialist staff leads to inventory control being clumsy and inefficient
• Each division may handle inventory differently leading to inconsistantly and makinging it harder for seniot managers to pinpoint problems
• Smaller amounts of inventory may result in understocking

Question 7

What are advantages of computerised stock control?

Answer 7

• Accurate and consistnat monitoring of stock
• New stock can be automatically reordered when the re-order level is reached
• Allows trends in stock to be seen by managers e.g. best sellers or slow moving stock
• Can highlight regions of variation or seasonal dermand changes
• Staff cannot steal as they know inventory is closely monitored

Question 8

What are disadvantages of computerised stock control?

Answer 8

• High instillation costs
• Maintanance costs and downtime during breakdowns
• Staff need to be trained to opperate