Stock Control

Keywords Stock Control – The process in which the business ensures that stocks of inputs are adequate to meet production requirements, and that the stocks of the finished product are readily available to meet customer demand. Buffer Stocks – Stock that is kept as a back-up to ensure the business never runs out completely of inputs or finished stock. Just-in-time (JIT) – Keeps the cost of holding stocks to a minimum by planning production so that raw materials, components and work in progress are delivered just as they are required.

What is Stock? Stock has different meanings in business it could be: Raw materials – Used in the production process Work-in-progress – Products in the process of being made Spares – Kept in case of capital machinery breaks down Finished products – Final goods ready to be sold or delivered A business must get the stock right - if they hold too much they risk higher storage and insurance costs, cash flow problems and increased obsolescence (waste). However, If they don’t hold enough stock then they may not be able to meet the demand of customers so they will go to a competitor who has the good in stock (E.g. A kettle in Currys is out of stock, customers buys at Argos instead).

Managing Stock EPOS Waste Management Stock Control Charts There are a number of ways that a business can use to manage their stock more efficiently: EPOS Waste Management Stock Control Charts Electronic Point of Sale A database that is kept up-to-date by using barcodes and scanners It is common in retail and generally straight forward Selling old stock on offer, its better to get less profit on an item then let it go to waste Put new stock at the back (E.g. In a supermarket put bottles of milk at the back so customers by the sooner BBD. Traditional method that can be integrated from an EPOS system However it is based upon assumptions that Deliveries are on-time and stock is at a constant rate

Stock Control Chart Maximum Stock – The most stock the business can hold Reorder Level – The level at which the business should reorder Minimum Stock – The point at which more stock is delivered Buffer Stock – Backup stock in case lead time is longer or demand is higher than expected Lead Time – The time it takes for stock to arrive from ordering Maximum Stock Reorder Level Stock Level (Units) Minimum Stock Lead Time Buffer Stock Time (Weeks)