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1. Operations
Stock Control

2. Stock refers to unused
quantities of
 Raw Materials
 Work in progress
 Finished Goods

3. Benefits of having stock
 Large order can mean discounts
 Less chance of running out of stock
 Work is never delayed or stopped due
to lack of raw materials which would
have meant no sales

4. Costs of Holding Stocks
 Opportunity Cost – other uses for
money tied up in stock
 Storage Costs
 Spoilage Costs

5. Choosing Suppliers
 Price
 Quality
 Availability
 Location

6. A poor purchasing mix results
in
 Over or understocking
 Increased costs
 Poor quality stocks

7. Deciding on level of stock to
hold
 Economic Stock Level – a stock level that will
minimise both stock holding and running out of
stock costs
 To calculate ESL the following information is
required
 maximum stock level to be held
 minimum stock level to be held
 delivery time for stock to arrive
 stock level when new order should be placed
 stock amount that should be ordered

9. Values for figures depend on
 Demand for finished product
 Seasonal Factors
 Amount of cash available to buy stock
 Type of stock – eg perishable,
fashionable
 Space available to hold stock

10. Past Paper Qus
 Discuss why it’s important to set your Re-order
level correctly (5)
 What does the term lead time mean? (1)