Stock Control

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Stock Control
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Why hold stock?

• Simple manufacturing organisation
• No need to hold stock
• All goods manufactured on demand
• However
• Need to hold stock so customers dont have to
  wait
• What do production department do when sales are
  slow?
• A buffer between PRODUCTION and SALES

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Advantages of holding large stocks

• Large orders
• Cheaper to manufacture in bulk
• Cheaper to buy raw materials in bulk

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Disadvantages of holding large stock

• Capital is tied up
• Costs money to store raw materials and finished
  goods
• Fashion/trends

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Functions of a stock control system

• Keep track of how much of each item is in stock
• Record the re-order level and re-order quantity
  for each item in stock
• Generate a re-order when more stock is required

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Inputs

• Addition of new items
• Customer order
• Returns
• Adjustments
• Purchase orders

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Outputs

• Reports
• Stock quantities
• values
• movements

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Purchase Ordering

• Purchasing dept
• Ensures that company does not run out of stock
• Needs reports from the stock control department
  which items have fallen below re-order level
  how many should be ordered
• Personal experience