Stock Control
Cards (14)
- what are buffer stocks?stock held by a business to cope with unforeseen circumstances. also known as just in case
- what is lead time?the delivery time from the reorder being placed and the stock arriving
- what is the reorder level?the amount at which a new order for stock is triggered
- what is just in time?a lean production technique used to minimise stock holdings at each stage of the production process
- what is waste minimisation?an aspect of lean production focusing on reducing waste in any business process such as wasted time labour and materials
- what is lean production?working practices derived from japan that focuses cutting waste whilst maintaining or improving quality
- reasons to hold stock
- enable production to take place
- satisfy demand
- precaution against delays from suppliers
- allow efficient production
- allow for seasonal change
- provide for a buffer
- how much stock should be held
- needs to satisfy demand
- risk of loosing stock value if held for too long
- manage working captial
- costs of holding stock?
- cost of storage
- interest costs
- obsolescence risk
- stock out costs
- advantages of buffer stocks?
- meets customer demand
- quickly respond to increases in demand
- continue with production even with delivery issues
- disadvantages of buffer stocks?
- money tied up in holding stock
- costs associated with stock holding
- risk of waste
- implications of poor stock control?
- waste of resources
- unable to meet customer needs
- damaged reputation
- under utilisation of other resources
- loss of competitiveness
- difficulty in valuing stock
- advantages of just in time?
- less costs of holding stock
- less working capital needed
- less ruined inventory
- lower associated costs
- avoids having unsold stock
- disadvantages of just in time?
- little room for error
- very reliant on suppliers
- unexpected orders are harder to meet
- any delays cause problems
- high initial set up costs
- complex systems