Topic 2.3.2 Working with suppliers

Question 1

What is procurement?

Answer 1

The process of buying and sourcing stock

Question 2

What is the role of procurement?

Answer 2

To get the right supplier,businesses need to make sure the supplier can make products quickly-deliver on time and can adjust to the growing/increase in demand of goods/services in the business
.A business should build a good relationship with there suppliers so they can potentially get a greater repayment time.
Suppliers should supply good consistent quality of products.

Question 3

What are logistics?

Answer 3

Logistics is concerned with the efficient storage and transportation of goods.Logistics aims to ensure that the right products will be ordered and delivered on time.

Question 4

How does logistics impact a business?

Answer 4

High customer satisfaction if the right quantity of the right product can be delivered at the right time to the right place.
-Reduced costs if can be done efficiently

Question 4

What makes a good supplier?

Answer 4

-Flexibility with deliveries
-Fair trade credit terms
-Reliable
-Consistent quality goods

Question 5

Why are good suppliers important?

Answer 5

-Late suppliers can hold up customers
-Can help business cash flow problems
This is because suppliers can give a business a extended trade credit time which means that a business has time to reduce other costs/to make money back to afford for the cost of there goods/services.As a result this helps reduce a business chances of failure.

Question 6

What is just in time stock?

Answer 6

Receiving stock from suppliers just before it is needed/

Question 7

What are the benefits of just in time stock?

Answer 7

-Cash not tied up in stock
-Stock will be fresh/especially for businesses that sell perishable goods
-Less storage space needed

Question 8

What are the disadvantages of just in time stock?

Answer 8

Unforeseen circumstances can cause late deliveries
-Operating a Just in time stock control requires reliable suppliers
-Can’t meet surges in demand
This is because the market is unpredictable and no one knows when demand is high or not and so a business may receive stock when demand is low and may not receive stock when demand is high.As a result this could lead to customer unsatisfacation