| what is under stocking | When an organisation holds an insufficient amount of inventory to be able to carry out production/fulfil orders. |
| name consequences of under stocking | The organisation may be unable to continue with production, The organisation may be unable to accept an unexpected large order, Continually ordering new inventory can increase administration costs, The organisation is paying for workers who are not being productive, Missing out on bulk buying discounts as not purchasing in large quantities |
| what is overstocking | When an organisation holds more inventory than it can use/sell. |
| name consequences of overstocking | Goods may deteriorate before they are used/sold, Goods could become obsolete (no longer needed by the market) Higher storage/insurance/security costs. Money is tied up in the inventory that has been purchased, More storage space is required to hold the inventory, Higher chance of theft from the warehouse/store |
| describe manual record keeping | Where record keeping is done manually a bin card (or inventory card) may be used to record inventory received and issued. Bin cards record inventory coming in (received) inventory going out (issued) and a balance. |
| what is epos | scanning barcodes/QR codes in the warehouse |
| what are spreadsheets used for in operations | using software to hold the inventory information and also carry out calculations and analysis |
| what are security tags and CCTV used for in operations | to deter theft of inventory from both the warehouse and store |
| why use a computerized inventory management system | Records will be more accurate compared to manual system, Inventory levels can be automatically updated, Inventory can be automatically ordered from your supplier, Easier to analyse the popularity of certain products |
| what is maximum inventory level | the highest amount of inventory an organisation should hold before it incurs extra costs |
| what is minimum inventory level | the lowest amount of inventory an organisation should hold below which they would become understocked |
| what is reorder level | the point at which a new order is placed with the supplier |
| what is reorder quantity | the amount of inventory ordered from your supplier. |
