The role of procurement revision notes

A system where goods are ordered and received only as they are needed in the production process, minimising inventory levels.

The total cost incurred by a business to hold and manage inventory, including storage, insurance, depreciation and opportunity costs.

Spare stock is extra inventory kept to cover unexpected demand or supply disruptions.

Supplier reliability is the likelihood that a supplier will deliver goods or services on time, in the correct quantity and quality, consistently over a period.

Procurement is the process of identifying, selecting, and acquiring goods or services from external suppliers to meet an organisation’s needs.

The process of aligning the timing, quantity and quality of supplies with a business’s production or sales needs.