Mr McGowan's Learning Blog: Stock Control Diagram

Mr Marcus McGowan MSc PgDip BA (Hons)

is Enterprise Coordinator and Teacher of Business Education at Hamilton Grammar School.

I have provisional registration in Computing and GTC Professional Recognition for Enterprise and ICT.

I have developed materials for Learning and Teaching Scotland and BBC Bitesize for Higher Business Management as well as delivering many INSETs on blogging and podcasting.

I have links with the Hunter Centre for Entrepreneurship through SIFE, and am a committee member of the SBEA.

If you'd like to contact me about materials, resources, or this blog then please click on the link to: email me

Tuesday, 29 November 2011

Stock Control Diagram

A business which holds stock will implement the following stock levels in order to meet customer demand at all times.

Minimum Level: this is the minimum amount of stock needed in case the required supply were to be delivered late. The business will never allow the stock level to drop below a certain point in order to prevent a resource shortage.

Maximum Level: this is the maximum amount of stock which can be held in the warehouse at any given time. This level is restricted by factors such as space; cost; and, delivery time.

Re-Order Level: this is when the stock level drops to a certain point and the process will automatically re-order the required stock. In order to decide at what point to re-order, businesses must consider the following: how long is the delivery time? how reliable is the supplier?

Lead Time is the time taken between making an order and its delivery, which replenishes stock.