Stock Control

Why hold stock? Simple manufacturing organisation No need to hold stock All goods manufactured on demand However Need to hold stock so customers don’t have to wait What do production department do when sales are slow? A buffer between PRODUCTION and SALES

Advantages of holding large stocks Large orders Cheaper to manufacture in bulk Cheaper to buy raw materials in bulk

Disadvantages of holding large stock Capital is tied up Costs money to store raw materials and finished goods Fashion/trends

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

Inputs Addition of new items Customer order Returns Adjustments Purchase orders

Outputs Reports Stock quantities values movements

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