Working with suppliers

• What must businesses manage effectively?

  Materials and stock
• What is the choice businesses have regarding stock management?

  Keeping additional stock or just-in-time control
• How are businesses affected by their suppliers?

  Through their relationship with suppliers
• What are the components of stock that businesses manage?

  • Raw materials
  • Work in progress
  • Finished stock
• What could happen if stock materials are not managed efficiently?

  Production may have to stop
• What does procurement mean in stock management?

  Getting the right supplies from the right supplier
• Why is effective stock control important for customers?

  Customers expect to buy desired products
• What are the consequences of running out of stock for businesses?

  Loss of sales and potentially customers
• What negative consequences can arise from holding too much stock?

  High storage costs and increased waste
• What can happen to perishable products if stock is not managed?

  Increased waste and decreased quality
• What might happen to income if a business sells excess stock at a reduced price?

  Reduced income for the business
• What are the potential impacts of logistics and supply decisions on stock management?

  • Affects production efficiency
  • Influences customer satisfaction
  • Determines storage costs
• What are the key aspects of managing stock effectively?

  • Balancing stock levels
  • Ensuring timely procurement
  • Minimizing waste and costs
• What is the minimum stock level also known as?

  Buffer stock
• Why is buffer stock important for a business?

  It allows operation during delivery delays
• What does the reorder level indicate for a business?

  When to order new stock
• At what stock level does the business need to reorder stock?

  300 items remaining
• How do many businesses manage stock levels today?

  Using computer software for automatic reordering
• How can stock levels be automatically updated in a business?

  When products are scanned at checkout
• What is the function of a barcode scanner in stock management?

  To read printed barcodes for monitoring stock
• How does automatic reordering benefit a business's stock management?

  Ensures accurate stock levels and timely orders
• What is just-in-time (JIT) stock control?

  A stock control method with no raw materials stored
• How does JIT stock control function?

  It has regular deliveries just before stock runs out
• What is buffer stock?

  A minimum stock level to prevent shortages
• Why is a good relationship with suppliers important for JIT?

  It ensures timely deliveries of stock
• What is lead time in stock control?

  The time from ordering stock to delivery
• What is a disadvantage of JIT stock control?

  Risk of running out of stock due to delays
• What are the advantages of JIT stock control?

  More space for sales and fresher products
• How does JIT affect capital tied up in stock?

  It reduces capital tied up in stock
• What is a bulk-buy discount?

  A cheaper price for buying large quantities
• What happens if a business misjudges stock needs?

  Customers may receive poor service due to shortages
• What are the key features of just-in-time (JIT) stock control?

  • No raw materials stored
  • Regular deliveries before stock runs out
  • Requires good supplier relationships
  • Reduces capital tied up in stock
  • Minimizes waste and storage costs
• What are the strengths and weaknesses of JIT stock control?

  Strengths:

  • More space for sales
  • Fresher products
  • Less capital tied up in stock
  • Reduced waste

  
  

  Weaknesses:

  • Risk of stock shortages
  • No bulk-buy discounts
  • Poor service if stock misjudged
• What is the purpose of procurement in business?

  Getting the right supplies from the right supplier
• What does logistics ensure in a business?

  Correct products are procured and delivered on time
• How do procurement and logistics impact a business?

  They affect costs, reputation, and customer satisfaction
• How can costs be kept lower in production?

  By ensuring production is quick
• What can delays in logistics cause for a business?

  They can cost money and limit cash flow
• What is cash flow?

  The movement of money in and out of the business
• How does the quality of raw materials affect a business?

  It impacts the business' reputation