Buffer Stock

Sandy kindly advised as to what is likely to come up in Monday's ECR Exam. He mentioned Buffer Stock. I googled it (as I hadnt heard of it before) and came up with the meaning as extra stock held. What can we be examined on about Buffer Stock as I have not done any studies about this?

Thanks

Comments

  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    If the lead time for a raw material is 1 to 3 weeks (depending on the weather) e.g. Elgin based supplier sending it by road
    And we use 30,000 units per week
    We'd be able to workout that we need to order when the stock falls to 90,000 to be sure of sufficient to keep production running
    If we actually order at 100,000 that would be because we plan to have 10,000 as a buffer incase we need more than 30,000 units in a week (or extreme weather meant the delivery was not within the 3 week maximum)
    Sandy
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    www.sandyhood.com
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