Similarly businesses dont like disposing of excess stock Click on the icon to

out perfectly good food. Similarly, businesses don’t like disposing of excess stock! Click on the icon to find out how a stock control system can help. Businesses try to strike the perfect balance by using stock control systems. These systems maximise turnover and minimise stock sitting in storage. If they don’t maintain this balance, problems can occur. • If they don’t order enough stock, they lose sales or cannot operate their business efficiently. • If they order too much, they need to sell stock at a discount or dispose of it, both of which reduce profit margins. Note Good stock control systems ensure there’s enough stock to meet demand, but not so much that costs increase and profits are reduced. How do you prevent over- or under-supply? Every establishment has a range of core items which are crucial to operations. Never allow them (or any goods you sell!) to run out or become overstocked. Click on the dot points to find out how.  Keep track of goods on hand.  Identify your minimum stock levels of particular items. This number represents the minimum amount of stock that should be on hand at any given time. Parveen Kumar KAMBOJ

SITXINV003 Purchase goods 2016 Edition 12  Place an order for stock as soon as it reaches its minimum level.  Order the right amount of the right stock at the right time. The amount ordered is based on how much stock you turnover (or use) in a specific period of time. Hot tip To make sure orders arrive punctually, remember the lead time. This is the lag between placing and receiving an order. This depends on a few things. Who your supplier is What stock you are ordering How much you want Stock might get to you the next day, but you could wait days, weeks or even months! Consider this when planning stock orders. Otherwise, you may end up short. How do you forecast the required quantity? There are different forecasting methods you can use to calculate the required quantity of goods. Click on the pictures to see the forecasting methods you’ll learn in this unit.  Stock turn and moving averages  Standard measures  Standard yield test  Butcher’s yield test  Popularity index  Use of sales reports for future customer bookings How can you use stock reports to calculate quantities? A number of reports are regularly generated by computerised systems. They provide information on sales patterns of individual items or categories of products, revenue generated, cost of goods sold, stock turnover, wastage and other topics. One report that you can easily produce on both manual and computerised stock control systems is a stock usage report. A stock usage report is a document that provides details about the types of stock used for a given period or for a particular function. Click on the icon to see an excerpt from an example of a stock usage report. Parveen Kumar KAMBOJ