Purchasing And Stock Control Flashcards
(14 cards)
Why is purchasing and working with suppliers important?
It ensures the availability of quality materials, influences costs, and impacts production efficiency.
Effective supplier relationships can lead to better pricing, timely deliveries, and improved product quality.
What is meant by stock control?
It refers to the process of managing inventory levels to meet customer demand without overstocking or stockouts.
Stock control aims to maintain optimal inventory levels and minimize carrying costs.
What is the importance of controlling stock?
It helps in minimizing costs, preventing stockouts, and ensuring efficient operations.
Proper stock control can enhance customer satisfaction by ensuring products are available when needed.
Name traditional stock control methods.
- First-In, First-Out (FIFO)
- Last-In, First-Out (LIFO)
- Economic Order Quantity (EOQ)
These methods help manage inventory turnover and optimize stock levels.
What is Just-In-Time (JIT) stock control?
It is a strategy that aligns inventory levels with production schedules to reduce carrying costs.
JIT aims to receive goods only as they are needed in the production process.
What is computerized stock control?
It uses software systems to track inventory levels, orders, sales, and deliveries in real-time.
Computerized systems improve accuracy and streamline stock management processes.
What are the main components of stock control diagrams?
- Re-order level
- Lead time
- Buffer stock
- Minimum stock level
Understanding these components helps in effective inventory management.
What is the impact of holding too much stock on businesses?
It can lead to increased carrying costs, potential obsolescence, and reduced cash flow.
Excess stock ties up capital that could be used elsewhere in the business.
What is the impact of holding too little stock on businesses?
It can result in stockouts, lost sales, and diminished customer satisfaction.
Insufficient stock can harm a business’s reputation and customer loyalty.
What is leadtime?
This is the amount of time taken for delivery to take place following the placement of order
What is Buffer Stock?
This is the stock level that will always be held in case of problems with delivery
What factors could lead to a long lead time?
Location of business
Rarity of materials
Improper scheduling of orders
What are the issues with not holding buffer stock?
Can’t deal with spikes in demand
Costs of economies of scale
Too much reliability with supplier
3 reasons why business would not hold buffer stock
Storage costs
Space use
Risk of damage/theft
