Managing Stock

Unit 3 Topic 3.2.5

Aims for today

• To understand traditional bar gate stock graphs.

• To understand the costs and benefits of using JIT systems of stock control (and where such systems might be appropriate and where not!).

‘Stock control is simple – just order it

when you need it’http://www.youtube.com/watch?v=d8xr_G_Voc4

Stock Management – How business control their stock

Stock refers to:1.Raw materials & other components (things that go into the production process)2.Work in progress- products that are semi finished by the producer3.Finished goods – products to completed to the right standard & are ready to be delivered to customers

Task 1: Thinking skills (Pairs)

A. What are the benefits of good stock control?Products are in a good condition, less waste, less storage capacity needed, easier to manage, ordering could be automated (hotel bars) good products = good reputation

B. What are the consequences of poor stock control?May loose sales, wastage, not using FIFO principle, health & safety issues, vermin, over or under ordering, expensive, poor management, disorganised etc

Stock control methods

1. Just in case (JIC)2. Just in Time (JIT)3. Justin Timberlake

What do you think these methods involve?

Task 2: Timed task

• In triads, research the main stock control methods:

1.Just in case (JIC)2.Just in Time (JIT)

- You have 15 minutes -

1. Just in case Stock control

1. Just in case stock control charts

2. Just in time

Advantages of stock control

1. Restaurants avoid running out of stock. As a result, customers can always receive what they order.

2. The system eliminates inexperience in the ordering & saves time.

3. Orders are based on the current stocks.4. Less waste means food costs are reduced = savings

for customer5. Less emergency deliveries = saving £6. Stock levels at optimum level

Disadvantages of stock control

Just a quickie!

http://www.businessstudiesonline.co.uk/live/index.php?option=com_content&view=article&id=2&Itemid=8

Answers!

Plenary Review Test:Girls V Boys

1. A business aims to keep at least 2,000 metal sheets in stock at any one time. This stock is called A a stock checkB a buffer stockC the maximum stock levelD the re-order level of stock

Answer B

Plenary Review Test

2. A company does not keep stocks. Its suppliers deliver material and components as and when they are needed. This system of stock management is called A Just In TimeB Just in CaseC Just When NeededD Just In Stock

Answer A

Plenary Review Test 3. The managing director of a company has a policy of not ordering stock unless it is absolutely necessary. However, all too frequently, work has to come to a stop because there is not any stock of components in the factory. As a result, output is lost and time is wasted. This would suggest that:

A the maximum stock level is too lowB the re-order level is too highC the minimum stock level should be loweredD the buffer stock level should be raised

Answer D