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Business operations
The role of procurement
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Created by
Reyaan Verma
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Cards (57)
What does JIT stand for in stock control?
Just-in-time
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What does JIC stand for in stock control methods?
Just-in-case
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What is the main principle of Just-in-time (JIT) stock control?
It involves not storing raw materials and having regular deliveries of only what is needed.
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Why is buffer stock not needed in JIT stock control?
Because deliveries are made just before existing raw materials run out.
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How does JIT stock control affect the ordering process for businesses?
Businesses order
smaller
but
more frequent quantities
of
stock.
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What is the primary purpose of Just-in-case (JIC) stock control?
To ensure there is always
stock available
for the
business
if
required
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What is essential for JIT stock control to be effective?
A
good relationship
with
suppliers
is
essential.
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What is the benefit of having suppliers local to the business in JIT stock control?
It
reduces
both
delivery
costs and
lead
time.
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What do most businesses rely on suppliers for?
Raw materials
or
components
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What is a potential disadvantage of JIT stock control?
A business may
run out
of stock due to
late deliveries.
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How does JIC stock control help during a sudden increase in demand?
It provides
excess stock
to meet the
unexpected demand
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What must businesses consider regarding JIT stock control?
They
must weigh
the
advantages
against the
disadvantages.
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Why is finding suppliers that meet a business's needs essential?
To remain
competitive
and
successful
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What is an example of how a business might implement JIC stock control?
A cereal business keeping
an
additional 15 boxes more than
predicted sales
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What are the advantages of JIT stock control?
More space
for
sales
due to
removal
of
buffer stock
Fresher products
from
smaller
, more
frequent deliveries
Less capital
tied up in
stock
, allowing
reinvestment
Reduced waste
and
savings
from
less stock
going
out
of
date
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What does procurement mean in a business context?
Getting the right
supplies
from the right
supplier
, at the right
price
and at the right
time
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Why is procurement considered a vital component of business success?
Customers
expect
products
to be
available
when they need
them
, and in the
right quantity
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What does removing buffer stock space allow businesses to do?
It allows
more space
to be
used
for
sales.
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What does logistics mean in a business context?
Making sure
the
correct products
are
procured
and that they will
arrive
when
needed
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What are the three main elements of logistics?
Transportation
,
storage
, and
distribution
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What are the three key factors a business needs to consider when selecting a supplier?
Cost
Quality
Reliability
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What is transportation in the context of logistics?
The process of getting goods or services from one part of the supply chain to the next
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What modes of transport might businesses use to move goods?
Boats
,
planes
,
lorries
,
vans
, or
pipes
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How does JIT stock control benefit the freshness of products?
It allows for
smaller
but
more frequent deliveries
, keeping products
fresher.
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What does storage (warehousing) involve?
Storing products
before they are
sent out
to
retail shops
or
directly
to
customers
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What is the purpose of distribution in logistics?
To ensure
products
make their way to the
end customer
in the most
efficient
way possible
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What are the advantages of Just-in-case (JIC) stock control?
Increases the
level
of
customer satisfaction
Reduces
the chance of
running out
of
stock
Benefits
from
bulk-buy discounts
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How do procurement and logistics impact a business?
They have impacts
on a
business’ costs and efficiency
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Why is cost a vital consideration for businesses when selecting suppliers?
It helps keep
variable
costs low and maintain
higher profit margins
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What happens to capital in a JIT system?
Less capital
is
tied up
in
stock
, allowing it to be
reinvested
or
spent elsewhere.
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How can business costs influence overall financial performance?
Most businesses aim to keep costs as low as possible while providing suitable quality products
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What can reduce unit costs in a business?
Quick production
or using
inferior quality materials
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What can delays in procurement or logistics cost a business?
They can cost money
and
limit cash flow
if products are
damaged
,
lost
, or
unavailable
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Why is efficiency important to the success of a business?
It relates to how
quickly
and
effectively
an item is
produced
or
delivered
to a
customer
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How does purchasing more products from suppliers affect a business's negotiation power?
It increases their power to negotiate discounts
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How can being efficient reduce production costs?
Less time
or
resources are required
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How does JIT stock control help reduce waste?
By having
less stock
that could go
out
of
date.
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What should businesses be cautious about when focusing on costs and efficiency?
They must also focus on the quality of the product or service being delivered
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What could happen if
a
business focuses too much on costs and efficiency?

It could have
a
negative overall impact on the business
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What are the disadvantages of JIT stock control?
Difficulty
reacting to
unexpected
changes in demand
Inability to use
bulk-buy
discounts
Risk of
poor
customer service due to
stock
misjudgment
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