Managing Stock Year 11 Business Studies Learning Objectives

Managing Stock Year 11 Business Studies

Learning Objectives To recognise the possible impact of having too much or too little stock To be able to create and interpret bar gate stock graphs

To store or not to store? 3 types of stock ◦ Raw material Perishable Non Perishable ◦ Work in progress ◦ Finished products

Why worry about stock? Production & purchasing needs to ensure the business has: ◦ ◦ Has sufficient stocks for production Does not overstock and cause a waste Buys stocks of the right quality Purchases stocks at competitive prices

Stock Management What is Stock Management? The right quantity and quality of stock at the right time Stock handled and used correctly so they are at the right place at the right time Costs and Waste kept to a minimum

Video http: //news. bbc. co. uk/1/hi/business/77886 05. stm http: //news. bbc. co. uk/1/hi/uk/7782634. stm

2 parts of Stock Management Stock Rotation ◦ Using oldest stock first Important if stock is perishable Stock Wastage ◦ Loss of stock to a business in production process Cut offs from cloth Re-working items Defective products

Task 2

Bar Gate Stock Graphs – 3 levels MINIMUM STOCK LEVEL To prevent too little stock being held, the production manager sets a MINIMUM STOCK LEVEL needed to keep the business running Also called BUFFER STOCK Not sensible to drop to the minimum stock level, as deliveries can take time to arrive from suppliers – this is LEAD TIME

Bar Gate Stock Graphs RE-ORDER LEVEL is set to allow for time between placing an order and delivery MAXIMUM STOCK LEVEL is set to keep costs low and avoid wastage ◦ Depends on storage, perishables, fashion, season, cash flow

Bar Gate Stock Graphs 800 Maximum Stock Level 700 600 500 Number of boxes (stock) 400 Re Order Level 300 Minimum Stock Level 200 Lead Time 100 1 2 4 3 Weeks 5 6

Buffer Stocks Also known as ‘Just in case’ – JIC stock control

How is stock measured? Traditional Stock taking ◦ Manually count the stock EPOS - Electronic Point of Sale ◦ as go through the checkout it checks the stock

Homework Over to you Page 45 Due in next Tuesday

Tasks 3

What is lean production? Developed in Japan by Toyota Aim to produce more by using less Uses a range of techniques to reduce waste and use the minimum amount of resources and workers Workers are encouraged to think about ways to improve their own productivity

JIT – Just in time A Japanese method that aims to keep stocks to the bare minimum Stocks are delivered to the production line ‘just in time’ to be used

Advantages & Disadvantages

Review Who orders the stock? What are the 3 types of stock? What is Stock Rotation? What are the 3 levels of stock shown on a stock control graph? What does EPOS stand for?