1. Managing stock usage
Stock rotation = method of organising stocks so the oldest supplies are used first.
Computer-based stock control
EPOS (Electronic Point of Sale) assists in the tracking of stock. Barcode monitors sales and movements of stock in the store.
Reducing the overall level of stock
Minimise the amount of stock kept to reduce costs of high stockholding

2. Stock Control Several methods of stock control exists
They focus on the RE-ORDER QUANTITY (how much stock is ordered when a new order is placed) and the RE-ORDER LEVEL (the level of stock when an order is placed)

4. Assumptions… Sometimes deliveries are late = delays in stocks arriving
Firms have to use buffer stock
Re-order quantities need to be reviewed regularly
Suppliers might offer discounts for ordering larger quantities
Quantities of stocks used in each time period are unlikely to be constant.
Production levels fluctuate according to demand

5. Draw a stock control chart using the following information:
Buffer stock level = 1,000 units
Maximum stock level = 10,000 units
Lead time = 1 week
Stock usage = 500 per day
What will happen to the reorder point if the lead time is:
Increased - Reduced

6. Your turn…
Ann Brennan runs Shepherds Bakery. Stocks of raw materials at the business are currently purchased in response to usage. For example, the bakery uses on average 500 kilos of flour per week. The most Ann wishes to hold at any time is 2,000 kilos. She would be worried if the stock fell below 500 kilos. An order time takes one week to arrive, so Ann always re-orders when her stock falls to 1,000 kilos.
What is meant by the terms:
Re-order level
Buffer stock
Lead time?
Draw a stock control graph for flour at Shepherd’s Bakery over a six week period.
Draw a second graph showing the situation if twice the normal amount of flour were used in the fourth week.

7. Define the following terms….
Buffer stock
Re-order level
Lead time