Scribd
Upload
65 views1 page

Operations Homework No 2 Example Solutions

The just-in-time system aims to limit stock holdings to zero by delivering materials to production facilities just before they are used. This minimizes costs like warehousing and security by keeping money in the business rather than tied up in stock. It also reduces waste and protects against obsolete inventory. However, disrupted supplier deliveries could stop production and lost sales, and quality cannot be checked as thoroughly since materials are needed immediately.

Uploaded by

knoxbusiness
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
65 views1 page

Operations Homework No 2 Example Solutions

The just-in-time system aims to limit stock holdings to zero by delivering materials to production facilities just before they are used. This minimizes costs like warehousing and security by keeping money in the business rather than tied up in stock. It also reduces waste and protects against obsolete inventory. However, disrupted supplier deliveries could stop production and lost sales, and quality cannot be checked as thoroughly since materials are needed immediately.

Uploaded by

knoxbusiness
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 1

Operations Homework No.

2
Example Answer
Question 1
Effective stock control is important to achieve efficient production.
Describe the just-in-time system and its advantages and disadvantages
for an organisation such as Coca-Cola. (2003Q5c) – 9 marks

The Just-in-Time system is a method of stock control which aims to limit stock
holdings to zero. Materials are delivered to the production facilities just-in-time to
be used in production.

This means that the costs of stockholding are minimised eg reduced


warehousing costs, and security costs. Money which would previously have
been tied up in stock is now available for other uses within the business. With
a reduction in the stock held, there is less likelihood of waste (or possibly the
elimination) as materials have less chance of deteriorating or becoming obsolete.
In addition the company protects itself from changes in fashion, which would
previously have left it with stock which would be worthless. More space is
available in the production area and there is a closer relationship with
suppliers.

There are however dangers associated with disrupted production if suppliers


don’t deliver on time, which could result in lost sales. While there may be a
close relationship with suppliers, the business is very dependent in them being
reliable. When goods arrive at the production facilities there is less chance to be
able to check the materials for quality as they are required to be used
immediately in production. Increased ordering and administration costs occur
with more orders being placed (in the case of Dell every 2 hours) with the business
also possibly loosing bulk buying discounts.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy