MediChill makes insulated medicine boxes. It holds £180,000 of components and pays £24,000 a year for storage. Its UK supplier can deliver within 24 hours, but monthly orders vary by up to 35%.
Option 1: Adopt JIT and arrange daily component deliveries
Option 2: Keep the current level of component stock
Justify which one of these two stock-control options MediChill should choose.
38 exam-style questions on Edexcel GCSE Business 2.3 Making operational decisions, covering 2.3.1a The purpose of business operations, 2.3.1b Production processes, 2.3.1c Impacts of technology on production, 2.3.2a Managing stock: bar gate stock graphs, 2.3.2b Managing stock: just in time (JIT), 2.3.2c Relationships with suppliers, 2.3.2d Impact of logistics and supply decisions, 2.3.3a Quality control and quality assurance, 2.3.3b Quality, costs and competitive advantage, 2.3.4a The sales process, and 2.3.4b The importance of good customer service. Each one has a worked solution and a mark scheme showing where the marks go.