4.2

Question 1

Inventory

Answer 1

Raw material, semi finished (work in progress) or finished goods held by a company with basic objective of maintaining continuity of operation

Question 2

Inventory Managment

Answer 2

Process of ordering, storing and using a company’s inventory

Question 3

Just in case (JIC)

Answer 3

Aims to reduce the risk out of running inventory to the minimum by holding high buffer inventory level

Question 4

Advantages of JIC (4)

Answer 4

1. Prevent loss of sales - have inventory
2. no idle fop - constant production
3. Urgent orders - no delivery cost
4. economies of scale

Question 5

Disadvantages of JIC (3)

Answer 5

1. Opportunity cost - money can not be used else where
2. Storage cost
3. Inventory being obsolete

Question 6

Factors to decide to hold level of inventory (4)

Answer 6

1. Type of product - perishable
2. Industry - manufacturing or retail
3. Reliability of supplier
4. Economic environment