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I am going to relate the stock control and forecasting techniques that Cadbury use

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Introduction

C3: The relationship between stock control and forecasting techniques Used in the production methods employed For this part of my assignment I am going to relate the stock control and forecasting techniques that Cadbury use with the production methods that Cadbury use. When Cadbury buy stock, it has to be considered carefully by Cadbury, the correct quantities of the stock should be purchased to reduce the amount of wastage should be controlled so that loses are controlled. Cadbury purchases its main ingredient cocoa beans from Ghana, which is then taken to marlbrook where the cocoa beans are cleaned and grounded. After this they are imported to the UK in the Bourn Ville factory where the production of the product is completed. Cadbury knows how much stock that has to be purchased due to the time series analysis that is done. The time series analysis shows historical data which Cadbury use to analyse and predict the future trends of the sales of products. ...read more.

Middle

For example if Cadbury decided to lower the price of the product by 25% then the sale trends are likely to change and the amount of stock purchased has to be increased as well, because if the price of the product decreases then it is very likely that customers are going to be purchasing the product more often during the set time period that the time series analysis covers. However if Cadbury decided to increase the price of the product then it is very likely that customers are less likely to purchase the product hence less stock would be needed because Cadbury would have to produce less products. Employing staff The staffs that the manager at Cadbury employs needs to have experience about the job role they are employed for. Employees need to adapt to their job role quickly so that they can work efficiently. ...read more.

Conclusion

it may be hard to find a replacement for the person because of the skills that are needed for that job role. Forecasting Forecasting gives Cadbury a prediction of the selling trends of products. To make the forecast, the trend line must be accurate. That is the reason for why forecasting products for Cadbury is vital, this relates to stock control because forecasting helps Cadbury to predict how much stock is needed to produce the required amount of products. Problems with forecasts The accuracy of Cadburys forecast depends on many factors below are the most common: - Will the external environment remain the same? Will there be significant changes in the economic, technical and social environment? For example if customers all started to earn more maybe this would change their lifestyle and encourage them to buy more luxury products and chocolate is a luxury item. - Will the external environment remain stable? Will Cadbury keep the same objectives and follow the same polices? ...read more.

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Response to the question

In summary, the report is quite good. The report states a number of factors which could impact upon the price of the products that Cadbury's sell. However one section, does link the factor to the cost of the product, and ...

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Response to the question

In summary, the report is quite good. The report states a number of factors which could impact upon the price of the products that Cadbury's sell. However one section, does link the factor to the cost of the product, and some points aren't justified. The student clearly understands a basic concept, of that if Cadbury's purchase too much stock/inventory the business will not be able to sell all of their products. This in turn, would result in the business making a loss, which the student understands. The report states that suitable employee's have to be employed by the business. However the student doesn't mention the cost impact on the business if the business employs unsuitable employees. The price of the product would have to increase, if there are unsuitable employees working at the business, this is due to that this is an additional unnecessary cost, which would have to be added to the cost of producing the product. However on the flip side, the section 'Security', the student does understand the cost of this, which would impact on the price of the product.

Level of analysis

The student acknowledges that if the price increases, there is less demand. This is correct. However the student hasn't explained why the product may increase/decrease. The major factor is the cost of producing the product, alongside all their other costs of packaging, advertising, etc. The product price is a certain % above the cost price. If their cost price increases (for example, the raw cost of coca beans increases), the retail price may increase.

Quality of writing

The student states the term 'stock', however within business this is often known as 'inventory'. This would show the examiner that the student understands basic business technical terms.


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Reviewed by danielbeal 01/04/2012

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