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The role of procurement

Study how procurement and logistics affect costs, quality, efficiency and supply chain performance.

Objectives

Flashcards

Questions

90 min

Study time

AqaGcseBusinessBusiness operations

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Start revising The role of procurement

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Syllabus checklist

6 objective pages available

Managing stock3 objectives

Evaluate just in time stock management for a given business.
Explain the benefits of reduced stock costs and the risks of frequent deliveries and lost purchasing economies.
Explain the benefits and costs of holding spare stock and buffer stock.

Suppliers, logistics and supply chains3 objectives

Analyse factors affecting supplier choice, including price, quality and reliability.
Explain procurement and logistics and their effect on efficiency and unit costs.
Explain the benefits of effective supply chain management, including supplier coordination, value, reduced waste and faster production.

Just‑in‑time inventoryPurchasing economybuffer stockSupplier reliabilityUnit costSupply chain

Structure your evaluate answer clearly: Start with a brief statement of the system, then list benefits and drawbacks, and finish with a balanced recommendation.
Use EOQ to balance stock costs: Calculate the Economic Order Quantity to find the optimal order size that minimises total stock costs

Assuming JIT eliminates all stock risk: JIT reduces inventory but increases dependence on supplier reliability; businesses must manage lead times and have contingency plans.
Assuming lower stock costs always increase profit: Explain that while holding costs fall, ordering costs may rise and demand uncertainty can lead to stockouts, which can hurt sales.

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