Stock Control

Overview

Framework:
RQF
Level:
Level 2
Unit No:
M/617/5714
Credits:
3
Guided learning hours:
24 hours

Aim

The aim of this unit is to develop a learner’s understanding of stock control where stock management and stock systems are important considerations.

Unit Learning Outcomes

1

Understand stock control.

  • Stock control
    Using systems and processes to ensure the correct levels of stock are maintained.
  • Purpose
    To minimise stock holding costs whilst ensuring internal and/or external customer requirements are met.
  • Documents
    Picking; requisition; stock return; audit; transfer; adjustment; sales.
  • Stock types
    Raw materials and components; work in progress; finished goods; consumables.

Assessment Criteria

  • 1.1

    Explain what is meant by the term ‘stock control’.

  • 1.2

    Explain the purpose of stock control.

  • 1.3

    Explain the purpose of typical documents used as part of stock control.

  • 1.4

    Describe the four types of stock which must be controlled.

2

Know about stock management techniques and systems.

  • Techniques
    Stock review; Just-in-time; ABC analysis; first-in first-out; par levels.
  • Control systems
    Perpetual system; periodic system; barcode system; radio frequency information system.
  • Management systems
    Enterprise resource planning (ERP); cloud environments; stand-alone inventory management products.
  • Features
    Stock management; financial management; customer management.

Assessment Criteria

  • 2.1

    Describe different stock management techniques.

  • 2.2

    Describe stock management software systems.

  • 2.3

    Describe the different types of inventory control systems.

  • 2.4

    Describe the key features of a stock management system.

3

Know how to manage levels of different types 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 for each type of stock.

  • 3.2

    Show how to conduct stock checks for each type of stock.

  • 3.3

    Show how to control levels of stock for each type of stock.

  • 3.4

    Show how to control levels of stock for each type of 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 for each type of stock.

  • 4.2

    Show how to set the minimum re-order level for each type of stock.

  • 4.3

    Show how to adjust minimum re-order quantities for each type of stock.