Stock control Flashcards
What are the three forms stock can be held in?
-raw materials and componants
-work in progress
-finished goods
What is buffer stock?
Stocks held as precaution to cope with unforeseen demand
what is work in progress?
partly finished goods
What is lead time?
The time between placing the order and the delivery of goods
What do Stock control diagrams help visualise?
Lead Time
Re-order level
Buffer level of stock
Re-order Quanitities
what is meant by the re order level
The level of current stock when new orders are placed
What is re order quantity?
the amount of stock ordered when an order is placed
What are some Advantages of the buffer stock method?
-Can meet customer demand
-Quickly respond to increases in demand
-Continue with production even if a problem with stock deliveries
What are some Disadvantages of the buffer stock method?
-Money tied up in holding stock
-Costs associated with stock holding e.g. storage, staff, insurance
-Risk of waste e.g. out of date, damaged or obsolete
what are ways in which there is poor stock control
Holding too much stock
Holding too little stock
Implications of holding too much stock
- expensive storage
-opportunity cost of the money spent
-spoilage cost
-unsold stock
-shrinkage
What are the implications of holding too little stock?
-Not being able to cope with unexpected demand=loss of customers
-Halt production=labour and machine wastage
-Place more orders last min=missing out on economies of scale
What are Lean Production techniques?
Working practices derived from Japan that focus on cutting waste whilst maintaining, or improving, quality
What are the 2 Lean Production techniques?
Just in Time
Kiazen
What are some benefits of JIT?
Less costs in holding inventory
imporives cash flow as money not tied up in stock
reduce waste
more factory space for more productive use
