1. There are two types of stock control you need to know about
Traditional (bar gate)
Just in time
You are likely to be asked about the advantages and disadvantages of both
You also need to know how to read a stock control diagram – minimum stock level, maximum stock level and lead time

2. BAR GATE Stock Control Diagram
Maximum stock levels achieved after stock delivery. Stock levels decline during production.
Stock Level
Maximum Stock Level
When the stock level reaches the re-order level, it triggers a new order. The difference between the time of re-order and delivery is the ‘lead time’.
Re-order triggered
Re-order level
Minimum Stock Level
Lead Time
Difference between time of ordering and order arriving
Time

3. JUST IN TIME STOCK CONTROL
Holding buffer stock can be expensive – so some businesses use a Just in Time System.
This means stock arrives only when it is needed.
To be successful with this you need to have good relationships with your suppliers and trust them to deliver on time

4. Disadvantages of each system
Disadvantages of Just In Time
Disadvantages of Buffer stock
May have to turn customers if you have not anticipated a period of high demand
Costs of keeping stock can be high
May not be able to achieve discounts for large orders
Storage can be expensive
Increased carbon footprint due to more delivery's being required
Some items could perish and are wasted

5. If you don’t have the stock to please your customers – you may get a bad reputation

6. Too much stock could attract burglars and increase insurance costs

7. Storing stock can be expensive – high fixed costs

8. Too much stock and you may have to sell it off cheaper before it goes out of sell by date or out of fashion

9. Too little stock and customers will go elsewhere