Stock Control

Overview

Framework:
RQF
Level:
Level 1
Unit No:
L/617/5624
Credits:
3
Guided learning hours:
27 hours

Aim

The aim of this unit is to develop a learner’s fundamental awareness of stock control with an emphasis on the practical aspect of maintaining adequate stock levels.

Unit Learning Outcomes

1

Know about stock control. 

  • Stock control
    Manual or electronic system which maintains required levels of stock, identifies stock discrepancies and minimises stock wastage.
  • Components
    Stock planning; order cycles; stock tracking; stock balancing; stock audits; purchasing stock; receiving stock; storage of stock; picking and despatch of stock.
  • Documents
    Picking; requisition; stock return; audit; transfer; adjustment; sales.
  • Importance
    Maintaining correct balance; stock rotation; identify expired products; identify sales trends; reduce costs; meet customer demand; avoid unnecessary stock holding.

Assessment Criteria

  • 1.1

    Outline the components of a typical stock control system.

  • 1.2

    Give examples of documents typically used as part of stock control. 

  • 1.3

    Give reasons why stock control is important to a logistics organisation.

2

Know about supply and demand.

  • Supply and demand
    Supply is how much of a product can be offered to customers. Demand is how much of a product is required by customers.
    Lack of availability = low stock, high price; too costly to purchase; not meet customer demand; too much availability = high stock, low price; large purchases; high storage costs.
  • Importance of sufficient stock
    Meet internal production requirements; meet customer demand; meet sudden surges in demand; minimise impact of supplier delays; remain competitive.
  • Barriers to sufficient stock
    Inaccurate forecasting/planning; stock discrepancies; stock expiration; supplier delays; unforeseen increase in production; infrequent/insufficient audits; poor record keeping; poor stock counting; not ordering minimum order quantities.

Assessment Criteria

  • 2.1

    Outline ways in which supply and demand affects stock control.

  • 2.2

    Outline why it is important to have sufficient stock.

  • 2.3

    Describe barriers to maintaining sufficient stock levels.

3

Know how to manage levels of stock. 

  • Forecasting demand
    Historical data analysis; expert estimation; time series analysis; causal analysis; maintain up to date data.
  • Conducting stock checks
    Stop receipt and issue of product; obtain recorded level of stock; identify stock location; count stock; compare with record; adjust as required; annotate records; resume issue and receipt.
  • Controlling stock levels
    Set minimum order quantity; conduct periodic stock reviews; rotate perishable stock; first in, first out; maintain accurate records; check stock level when picking an order.
  • Ordering stock
    Determine lead times; set reorder points; set reorder amounts; consider costs (purchase and transport); just-in-time.

Assessment Criteria

  • 3.1

    Show how to forecast levels of demand.

  • 3.2

    Show how to conduct stock checks.

  • 3.3

    Show how to control levels of stock.

  • 3.4

    Show how to order stock.

4

Know how to maintain accurate records of stock. 

  • Updating stock levels
    Record all receipts; record all issues; adjust stock records after audits/checks; adjust stock records after disposal of products.
  • Adjusting minimum reorder level (RoL)
    RoL is the point at which an order needs to be placed based on stock level
    Formula average daily use x average lead time in days + safety level
  • Adjusting minimum reorder quantity (RoQ)
    RoQ is number of units to be ordered
    Formula 2 x quantity required x cost per order
                                  carrying cost per unit

Assessment Criteria

  • 4.1

    Show how to update stock levels.

  • 4.2

    Show how to set the minimum re-order level.

  • 4.3

    Show how to adjust minimum re-order quantities.