Logistics is the management of how goods and materials are moved, stored and delivered. Good logistics gets the right goods to the right place at the right time.

Why might a business buy from an overseas supplier despite the longer supply chain?

The overseas supplier may offer much lower prices or materials unavailable at home. The savings can outweigh the extra transport time and risk.

How does the time taken by suppliers to deliver affect a business?

Slow delivery from suppliers can hold up production and leave shelves empty. Fast delivery lets a business hold less stock and respond quickly to demand.

Why is reliability of supply important to a business?

A business must be able to count on goods arriving on time and in the right condition. An unreliable supplier can halt production and cause lost sales.

OCR GCSE Business J204

Business Activity

Topic overview Enterprise and entrepreneurship Business planning and the business plan Sole traders, partnerships and limited companies Business aims and objectives Internal and external stakeholders Organic and external growth How business functions depend on each other

Marketing

Topic overview The purpose of marketing Primary and secondary market research Market segmentation Product design and the product life cycle Pricing methods Point of sale promotion and advertising Place and the marketing mix

People

Topic overview The role of human resources Organisational structures and ways of working Communication in business Recruitment and selection Employee motivation and retention Training and staff development Employment law

Operations

Topic overview Production processes Quality of goods and services The sales process and customer service Consumer law Business location Procurement and choosing suppliers Logistics and supply chains

Finance

Topic overview The role of the finance function Sources of finance Revenue, costs, profit and loss Break-even Cash, liquidity and profit Cash flow forecasts

Influences on Business

Topic overview Ethical and environmental considerations The economic climate Globalisation and multinational companies International branding and competition

Operations

Logistics and supply chains

3 things to know
Component 02

Overview

Logistics and the supply chain, delivery times and reliability, just-in-time stock control, what happens when a link breaks, holding large or small stocks, and online retailers' logistics.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

Define logistics.

Key term

What is a supply chain?

Key term

Why does the length of a supply chain matter?

Questions from this subtopic

Each one with the model answer underneath.

1
Define logistics.
Model answer
Logistics is the management of how goods and materials are moved, stored and delivered. Good logistics gets the right goods to the right place at the right time.
2
What is a supply chain?
Model answer
A supply chain is every stage a product passes through from raw materials to the final customer. The chain includes producers, suppliers, transport firms and retailers.
3
Why does the length of a supply chain matter?
Model answer
Each extra stage adds time, cost and a chance of something going wrong. A short supply chain is usually faster and easier to control.
4
Why might a business buy from an overseas supplier despite the longer supply chain?
Model answer
The overseas supplier may offer much lower prices or materials unavailable at home. The savings can outweigh the extra transport time and risk.
5
How does the time taken by suppliers to deliver affect a business?
Model answer
Slow delivery from suppliers can hold up production and leave shelves empty. Fast delivery lets a business hold less stock and respond quickly to demand.
6
Why is reliability of supply important to a business?
Model answer
A business must be able to count on goods arriving on time and in the right condition. An unreliable supplier can halt production and cause lost sales.

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Business Activity

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Customers may receive quality.

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AOwners may gain from higher profit.

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Aim means a broad long-term goal of a business.

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