Materials, costs, ordering ect Flashcards
(22 cards)
raw materials used to produce goods as well as the goods that are available for sale are also known as ?
Materials inventory
Materials inventory
What are the three materials held by a manufacturing business ?
- Raw materials
- Work in progress
- Finished Goods
Materials inventory
What are the materials held by a trading business ?
Goods for resale
Materials inventory
What are the materials held by a service business ?
Consumable items
To work out the buffer inventory an equation uses the reorder level, average usage & the average lead time. What is the equation used ?
reorder level - (average usage x average lead time)
To work out the reorder level the equation uses the average usage, average lead time & buffer inventory. What is the equation used ?
(average usage x average lead time) + buffer inventory
To work out the maximum inventory level the equation uses the buffer inventory & the maximum reorder quantity. What is the equation used ?
buffer inventory + maximum reorder quantity
To work out the maximum reorder quantity the equation uses the maximum inventory level & the buffer inventory. What is the equation used ?
maximum inventory level - buffer inventory
To work out the minimum reorder quantity the equation uses the average lead time & the average usage. What is the equation used ?
average usage x average lead time
What are the two ways that a business can value their inventory held ?
- Buying price
- Net selling price
average usage x average lead time = M…… R…… Q…… ?
Minimum reorder quantity
maximum inventory level - buffer inventory = M…… R…… Q…… ?
Maximum reorder quantity
buffer inventory + maximum reorder quantity = M…… I…….. L…. ?
Maximum Inventory level
(average usage x average lead time) + buffer inventory = R…… L…. ?
Reorder level
reorder level - (average usage x average lead time) = B….. I…….. ?
Buffer inventory
Raw materials and components are materials held by a (Trading/Manufacturing/Service) business ?
Manufacturing business
Goods for resale are materials held by a (Trading/Manufacturing/Service) business ?
Trading business
Consumable materials are materials held by a (Trading/Manufacturing/Service) business ?
Service business
Retailers and wholesalers are examples of a (Trading/Manufacturing/Service) business ?
Trading business
What are the two methods of recording the inventory that comes in and out of a business ?
Hint - P…….. I…….. & J… I. T…
1.Perpetual inventory
2. Just in time
The (Just In Time/Perpetual Inventory) method records the issue and receipt of the inventory as it passes in and out of the business ?
Perpetual inventory method
The (Just In Time/Perpetual Inventory) method is favoured by manufacturing businesses and is where supplies and components are orded as and when they are needed ?
Just in time method
