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Chapter 12: Controlling (Stock Control (Key Terms in Stock Control…
Chapter 12: Controlling
Stock Control
Methods of Managing Stock Levels
Manual Stock Take
Just in time (JIT)
Main features
Holds minimum stock
Reliable suppliers
Completed just in time
Carefully planned
Reduce business costs
EDI (Electronic Data Interchange)
Benefits
Quicker re-ordering process
Lower costs
Lead times
Shorter processing times
Effective Stock Control
Too much stock can lead to:
Obsolete stock
Theft
Lower profits
Inefficient use of cash
Too little stock can lead to:
Loss of economies of scale
Storage costs
Loss of sales
Production costs
Key Terms in Stock Control
Minimum stock level
Re-order level
Maximum stock level
Lead time
Optimum stock level
Benefits of Stock Control
Feedback
Reduced costs
Theft
Increased efficiency
Types of Stock Control
Finished goods
Merchandise
Work in progress
Raw Materials
Financial Control
Methods of Financial Control
Cash Flow Forecast
Ratio Analysis
Budget Allocation
Quality Control
Achieving Quality Control
Quality Circles
Benefits
Employee motivation
Reduced costs
Improved quality
Quality Awards
Benefits
Consumer trust
Marketing
Exports
Pricing
Inspections
Total Quality Management (TQM)
Benefits of Quality Control
Customer satisfaction
Quality awards
Reduced costs
Purpose of quality control
Dectect
Prevent
Correct
Improve
Steps in Controlling
Measure performance
Compare performance with standard
Set the standard
Take corrective action
Credit Control
Setting up a Credit Control System
Set Credit Limits
Entire business and individual customers
Efficient Administration
Debt Collection Procedure
Check Customers' Creditworthiness
StubbsGazette
Bank or trade reference
Benefits of Credit Control
Reduces bad debts
Increased sales and profits
Lower risk of bankruptcy
Importance of Control
Business goals
Employee motivation
Increases sales and profits
Maximises resources