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Stock Management - Coggle Diagram
Stock Management
JIT
less costs in holding
inventory
less obselescence
little room for
error
reliance on
suppliers
hard to meet
unexpedcted orders
delays in
delivery is bad
Low Stock Levels
lower stock holding
costs
lower obsolescence
risk
less cash tied up in
working capital
lean operation
High Stock
Levels
no order delays
lower unit costs
through bulk
no stockouts
can handle demand
changes
Reducing
Waste
less obsolete stock
lower holding stock costs
cost saving leads to lower prices
better quality and more
reliable products
Types of Stock
:
raw materials
work in progress
finished goods
Main influences on
quantity of stock
held
satisfying demand
managing working
capital
=stock holding
ties up cash in
working capital
risk of losing
stock value
=obsolescence risk
Why
businesses
hold stock
precaution against
delays from
suppliers
allow for seasonal changes
Stock Chart
lead time
=amount of time beteeen placing order
and receiving stock
Buffer Stock
=amount of stock held
in case of unexpected orders
so they can be met