Fixed Time Period
A school canteen checks its stock every Friday. Which inventory system is being used?
Fixed Time Period
A restaurant receives fresh vegetables shortly before they are needed for cooking. Which system is this?
Just-in-Time.
A business needs less warehouse space after reducing the amount of stock it keeps. What advantage is this?
Lower storage costs / less warehouse space.
A shop reviews inventory every month and then places an order. Which system is this?
Fixed Time Period.
A supermarket has drinks, snacks and cleaning supplies stored for future sale or use. What are these items called?
Inventory.
A clothing store checks stock every two weeks. A popular shirt suddenly becomes very fashionable and sells out after five days. What weakness of Fixed Time Period does this show?
Stock may run out before the next scheduled review.
A bakery receives fresh cream every morning based on the number of cakes expected to be made that day. Which inventory system is being used?
JIT.
A business begins ordering smaller amounts more frequently and notices less food is being thrown away. What advantage is being shown?
Reduced waste/spoilage.
The school bookshop checks all notebooks, pens, and folders every Friday and places one order. Which system is this?
Fixed Time Period.
A shop orders far more soft drinks than it can sell, and many remain in storage for months. What inventory problem is this?
Excess inventory / too much stock.
A pharmacy checks its inventory every Monday morning. It has a target of 200 boxes of medicine, but only 75 remain. How many boxes should it order?
125 boxes.
A furniture factory receives wood shortly before production. A delivery truck breaks down and the wood does not arrive. What is the likely result?
Production may be delayed or stopped.
A company must receive deliveries several times each week instead of once a month. What possible disadvantage could this create?
Higher transport or ordering costs.
A supermarket checks inventory monthly but changes the amount it orders depending on what is left. Which system is this?
Fixed Time Period.
A business runs out of its best-selling product and customers leave without buying anything. What problem has occurred?
Stockout / too little inventory.
A hardware store keeps extra bags of cement because deliveries sometimes arrive late. What is this extra inventory called?
Safety stock.
A restaurant reduces its storage room because ingredients now arrive daily. What JIT advantage is being shown?
Lower storage costs / less warehouse space needed.
A business keeps a large amount of safety stock “just in case.” What cost may increase?
Storage/holding costs.
A factory receives paint only on days when furniture is scheduled to be produced. Which system is this?
JIT.
A factory stores steel before production, partly completed tables, and finished tables. Name the three types of inventory shown.
Raw materials, work-in-progress, finished goods.
A supermarket reviews canned goods on the first day of every month. Halfway through the month, demand increases unexpectedly. Explain why this system may cause a shortage.
Stock is not reviewed continuously, so the business may run out before the next scheduled review.
A computer manufacturer keeps very few spare parts. Customer demand suddenly doubles. Why might the company struggle to respond?
JIT keeps little extra inventory, so sudden increases in demand may be difficult to meet.
A company saves money on warehouse space after switching to JIT, but then a supplier strike causes production to stop. Identify one advantage and one risk shown in this situation.
Advantage: lower storage costs. Risk: dependence on suppliers/supply disruption.
A seafood restaurant has very little storage and receives fresh fish shortly before dinner service. Which system is this, and why?
JIT, because stock arrives close to when it is needed.
A business has limited storage space, unreliable suppliers and unpredictable demand. Name three things it should consider before choosing an inventory system.
Storage capacity, supplier reliability, demand patterns, delivery time, production needs, product type.