Inventory Management

Inventory is another word for:

• Stock

• Finance

• Staff

• Managers

Select the costs and risks of UNDERstocking:

• Reputation may suffer if order are not met

• Customer may be lost to competition

• Advertisement costs will increase

• Money will be tied up in stock

Identify the costs and risks of OVERstocking:

• Customers will not be able to buy what they want

• Staff will be made redundant

• Higher storage costs

• Items could deteriorate with age

The maximum order level is:

• The amount of inventory that the business should not fall below

• The amount of inventory that the business should not rise above

• The time that it will take for the stock to be delivered to the business

• The maximum amount of stock that the customer is allowed to order

The time from when an order is placed to when it is received by the customer is known as:

• Delivery time

• Lead time

• Wait time

• Dispatch time

The minimum stock level is:

• 600

• 300

• 200

• 100

The re-order level is:

• 300

• 500

• 400

• 100

The order quantity is:

• 600

• 200

• 500

• 100

The buffer stock level is:

• 300

• 200

• 500

• 100

Just-in-time inventory management is when:

• Customers have a short period of time to order their stock

• Stock is ordered just in time for when it is required

• Stock is delivered quickly

• The business does not have to order any stock