Topic 3 - business operations (2. the role of procurement) Flashcards
what is just in time
attempts to minimise the amount of stock held, stock arrives just in time to be used in th eproduction process
advantages of jit
less money tied up and lower opportunity cost
fewer materials to be damaged
less space needed
disadvantages of jit
more deliveries
vulnerable to delays
cannot benefit from economies of scale
what is jic
just in case holds stock just in case there is a delay from supplies or a sudden unexpected increase in demand
advantages of jic
always having stock available for production sales.
large quanitites in bulk (purchasing economise of scale)
disadvantages of jic
storage costs
what is purchasing economies of scale
the cost per unit falls if large orders are placed with suppliers due to a bulk discount.
what is procurement
getting the right supplies from the right supplier, at the right price the contract
what is the supply chain
all the businesses, people and activities that take part in the production processes from the start until it gets to the customer.
why does choosing the right supplier matter
if a supplier can deliver products on time, it means the customer will be happy want a supplier who is reliable good quality products efficiently good price
what factors does a business need to take into consideration when choosing a supplier
costs quality range of products supplied speed of delivery flexibility of supplier reliability reputation contract payment
what are logisttics
movement of goods services information and money throughout the production process.
