Physical Resources In a Business

Topics: Safety stock / Pages: 4 (767 words) / Published: Nov 8th, 2013
Physical Resources
Physical resources include:
Storage facilities – e­commerce
Buy or rent?

Plant, Machinery and Equipment
When to purchase
Buy or lease?

Materials and Stocks
Efficient purchasing
Just – in – Case Stock Control
Just – in – Time Stock Control

© Business Studies Online: Slide 1

Premises: Location
The Choice of location will depend upon the type of business being set up:




E.g. Solicitor

E.g. Clothes Shop

E.g. Shoe Manufacturer

Will often be located near to workers

Must be located near to customers

Often located near to good transport links

Local estate agents can give details of costs and availability of business premises
© Business Studies Online: Slide 2

Plant, Machinery & Equipment: When?
Acquiring machinery and equipment requires a careful planning process
It must be done in conjunction with the cash flow forecast There will be a tendency to buy all the equipment at once
However financially this would be unwise
As such it is important to consider the following factors when deciding when to buy equipment:
Which pieces of equipment are necessities?
How much will they cost to buy AND maintain?
How much money is available?

© Business Studies Online: Slide 3

Materials & Stocks: Stock Control
The word “stock” can refer to a number of things:
Raw materials and other components things that go into the production process

Work­in­progress products that are not yet finished, but where the production process has started

Finished goods products that have been completed to the right quality – and are waiting to be delivered to customers

Spares in case of machinery break down

© Business Studies Online: Slide 4

Problems of Holding Too Much Stock
Businesses want to hold as little stock as possible due to
Higher insurance

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