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How does a business get the right materials in the right quantity at the right time?

The supply chain and procurement: the meaning of the supply chain, procurement and choosing suppliers, the importance of good supplier relationships, stock control and the just-in-time and just-in-case approaches.

A focused answer to the Eduqas GCSE Business C510 content on the supply chain and procurement, covering choosing suppliers, supplier relationships, stock control, and the just-in-time and just-in-case approaches to managing stock.

Generated by Claude Opus 4.811 min answerUpdated 2026-06-02

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Quick answer

The supply chain is the whole network that gets a product from raw materials to the final customer: suppliers, the business, distributors and retailers. Procurement is the process of finding and buying the materials, components and services a business needs. When choosing a supplier, a business weighs price, quality, reliability, lead time, flexibility, location and ethical standards. Good supplier relationships matter because a reliable supplier delivers the right quality on time, may offer better prices and trade credit, and helps the business keep its own promises to customers. Stock control is about holding the right amount of stock: too little risks running out and disappointing customers, too much ties up cash and risks waste. Just-in-time (JIT) means ordering stock to arrive only as it is needed, so almost no stock is held, which cuts costs and waste but depends on reliable suppliers and risks stockouts. Just-in-case (JIC) means holding a buffer of stock so the business can always meet demand, which is safer but ties up cash and storage space. The right approach depends on the product and how reliable supply and demand are.

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What this topic is asking
The supply chain
Procurement and choosing suppliers
Good supplier relationships
Stock control
Just-in-time and just-in-case
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What this topic is asking

Eduqas C510 wants you to understand the supply chain and procurement: what the supply chain is, how a business chooses suppliers, why good supplier relationships matter, and how it manages stock, including the just-in-time (JIT) and just-in-case (JIC) approaches. The exam often gives a business choosing a supplier or a stock approach, so you must weigh the trade-offs.

The supply chain

Managing the supply chain well means the right materials and products arrive in the right quantity, quality and time, all the way through to the customer. A break anywhere (a supplier failing, a delivery delayed) disrupts the whole chain.

Procurement and choosing suppliers

The cheapest supplier is not always the best: a low price is no good if the quality is poor or deliveries are unreliable, because that damages the business's own output and reputation.

Good supplier relationships

A strong relationship with suppliers is a real asset.

Stock control

Just-in-time and just-in-case

These are two opposite approaches to stock.

The right approach depends on the product (perishable goods favour JIT; unpredictable demand favours JIC) and on how reliable supply and demand are.

Comparing the stock cost of JIT and JIC

Set out the figures

A manufacturer uses $1{,}000$ components a week, each costing $5$ . Under just-in-case it holds $4$ weeks of stock as a buffer; under just-in-time it holds about $0.5$ of a week. Holding stock costs $10\%$ of its value per year in storage and finance.

Average stock value under each approach

\text{JIC stock} = 4 \times 1{,}000 \times 5 = 20{,}000. \qquad \text{JIT stock} = 0.5 \times 1{,}000 \times 5 = 2{,}500.

Annual holding cost of each

\text{JIC holding cost} = 20{,}000 \times 0.10 = 2{,}000. \qquad \text{JIT holding cost} = 2{,}500 \times 0.10 = 250.

Interpret the result

Just-in-time cuts the value of stock held from $20{,}000$ to $2{,}500$ , and the yearly holding cost from $2{,}000$ to $250$ , a saving of $1{,}750$ a year, plus the cash freed up by not tying $17{,}500$ into stock. That is the financial case for JIT. The catch is risk: with only half a week of components, one late delivery could stop production, so JIT only works with reliable suppliers and good forecasting. Putting numbers on both the saving and the exposure is what a strong analysis of stock approaches does.

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Q1. State two risks of holding too much stock. [2 marks]

Cue. Cash tied up, storage cost, goods becoming damaged/out of date/unsellable.

Q2. A firm uses $500$ components a week at $4$ each and holds $3$ weeks of stock. Calculate the value of stock held. [2 marks]

Cue. $3 \times 500 \times 4 = 6{,}000$ .

Exam-style practice questions

Practice questions written in the style of WJEC Eduqas exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.

Eduqas 20182 marksState two factors a business should consider when choosing a supplier. (Component 1)

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A 2-mark AO1 recall question, one mark per valid factor. Acceptable factors include: price (the cost of the materials), quality of the materials, reliability (delivering the right amount on time), lead time (how quickly they deliver), flexibility (coping with changes in orders), location, ethical and environmental standards, and the trade credit or payment terms offered. Markers want genuine selection criteria; a vague answer such as "a good supplier" without naming a factor would not score. Each clear factor earns a mark.

Eduqas 20216 marksA growing restaurant is deciding whether to switch from a just-in-case to a just-in-time approach to stock. Analyse the effects this change could have on the business. (Component 1)

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A 6-mark Analyse needing developed chains applied to the restaurant. Effect one (lower stock costs and fresher ingredients): just-in-time means ingredients arrive only as needed, so the restaurant holds little stock, which cuts the cash tied up in stock and the cost of storage and waste, and means fresher food, an advantage for a restaurant. Effect two (greater risk of running out): with almost no buffer stock, any late delivery, supplier problem or sudden surge in customers could leave the restaurant unable to serve dishes, harming its reputation, so it depends heavily on reliable suppliers and accurate forecasting. The chain to credit links each change to a consequence for the restaurant. Markers reward two developed effects (typically a cost or freshness gain set against the risk of stockouts) applied to the restaurant, not a generic comparison of the two methods.

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Sources & how we know this

WJEC Eduqas GCSE Business specification (C510) — WJEC Eduqas (2017)