STOCK CONTROL Having stock protections against unexpected events - sudden increase in demand or suppliers are late with deliveries. Stock is classified into 3 broad types: raw materials and component parts work in progress finished goods control systems aim to provide enough stock to deal with uncertainties but which do not tie up working capital (money). Holding too much stock is just as big a problem as holding too little: LOW STOCK - understocking HIGH STOCK - overstocking may have to halt or cut production working capital tied up and not rush orders cost more – earning income administration costs and more need for large physical space – has expensive basic cost financial costs implications cannot meet a sudden increase in increased cost of stock holding eg demand from consumers security, insurance, wages loss of competitiveness if customer stock may become out-of-date or left unsatisfied deteriorate ISSUING STOCK Stock is issued upon receipt of an official REQUISITION FORM detailing: what is required by whom and who is authorising payment Stock levels are monitored: manually a card system which is time-consuming and can be unreliable using a custom designed database or spreadsheet which automatically – calculates the balance and re-orders when required it may use BARCODES stocktaking - a physical count of the stock completed at least once a year STOCK CONTROL DIAGRAM AND STOCK LEVELS
STOCK CONTROL Having stock protections against unexpected events - sudden increase in demand or suppliers are late with deliveries. Stock is classified into 3 broad types: raw materials and component parts work in progress finished goods control systems aim to provide enough stock to deal with uncertainties but which do not tie up working capital (money). Holding too much stock is just as big a problem as holding too little: LOW STOCK - understocking HIGH STOCK - overstocking may have to halt or cut production rush orders cost more – administration costs and more expensive basic cost cannot meet a sudden increase in demand from consumers loss of competitiveness if customer left unsatisfied working capital tied up and not earning income need for large physical space – has financial costs implications increased cost of stock holding eg security, insurance, wages stock may become out-of-date or deteriorate ISSUING STOCK Stock is issued upon receipt of an official REQUISITION FORM detailing: what is required by whom and who is authorising payment Stock levels are monitored: manually a card system which is time-consuming and can be unreliable using a custom designed database or spreadsheet which automatically calculates the balance and re-orders when required – it may use BARCODES stocktaking - a physical count of the stock completed at least once a year STOCK CONTROL DIAGRAM AND STOCK LEVELS
operations_notes.docx