Why do manufacturing businesses hold stoc ?
Hi isobel. When I worked in electronics manufacturing we had 3 production lines. Each product used over 900 parts. The machines on the line could construct a 900 part board in 40-60 seconds (this is pritty slow on average). Although part suppliers could provide next day parts, many cpu and fpga chips are hard to source with long lead times based on the quantity we needed. So order long lead time first, then everything else. Once batch one is started, batch 2 is ordered for. The idea is to get min overlap in stock but never a gap. Plus 20% extra ontop of what you need incase something goes wrong I.e. damaged part etc.
Get an answer in 5 minutes from expert tutors at Oxford, Cambridge, Imperial and more.