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Laboratory work 3. Stock control methods
Inventory control is the means by which materials of the correct quality and in correct quantity are made available as and when required with due regard to economic in storage and ordering cost. Hear the desired level of inventory can neither be high or low because high level inventory will lead to increase in carrying cost while low level of inventory will lead to increase in ordering cost.
There are several methods for controlling stock, all designed to provide an efficient system for deciding what, when and how much to order.
You may opt for one method or a mixture of two or more if you have various types of stock.
● Stock review - you have regular reviews of stock. At every review you place an order to return stocks to a predetermined level.
Just In Time (JIT) - this aims to reduce costs by cutting stock to a minimum. Items are delivered when they are needed for immediate use. This means that less storage is needed however there is a risk of running out of stock, so you need to be confident that your suppliers can deliver on demand.
Stocktaking involves making an inventory, or list, of stock, and noting its location and value. It's often an annual exercise - a kind of audit to work out the value of the stock as part of the accounting process.
Codes, including barcodes, can make the whole process much easier but it can still be quite time-consuming. Checking stock more frequently - a rolling stock take - avoids a massive annual exercise, but demands constant attention throughout the year.
Radio Frequency Identification (RFID) tagging using hand-held readers can offer asimple and efficient way to maintain a continuous check on inventory. Any stock
● issue stock
The simplest manual system is the stock book, which suits small businesses with few stock items. It enables you to keep a log of stock received and stock issued.
It can be used alongside a simple re-order system. For example, the two-bin system works by having two containers of stock items. When one is empty, it's time to start using the second bin and order more stock to fill up the empty one.
Stock cards are used for more complex systems. Each type of stock has an associated card, with information such as:
● information about past stock history
More sophisticated manual systems incorporate coding to classify items. Codes might indicate the value of the stock, its location and which batch it is from, which is useful for quality control.
Choose a system
● automatic updating, selecting groups of items to update, single-itemupdating
● using more than one warehouse
Avoid choosing software that's too complicated for your needs as it will be a waste of time and money.Using RFID for inventory control, stock security and quality management
The tag is interrogated by an RFID reader which transmits and receives radio signals to and from the tag. Readers can range in size from a hand-held device to a "portal" through which several tagged devices can be passed at once, eg on a pallet.
The information that the reader collects is collated and processed using special computer software. Readers can be placed at different positions within a factory or warehouse to show when goods are moved, providing continuous inventory control.
Using RFID tagging for stock control offers several advantages over other methods such as barcodes:
● tags can be given unique identification codes, so that individual products can be tracked
● certain types of tag can be overwritten, enabling information about items to be updated, eg when they are moved from one part of a factory to another
The costs associated with RFID tagging have fallen over recent years, and continue to do so, to bring the process within the reach of more and more businesses. The benefits of more efficient stock control and improved security make it particularly attractive to retailers, wholesalers or distributors who stock a wide range of Control the quality of your stock
Quality control is a vital aspect of stock control - especially as it may affect the safety of customers or the quality of the finished product.
Efficient stock control should incorporate stock tracking and batch tracking.
This means being able to trace a particular item backwards or forwards from source to finished product, and identifying the other items in the batch.
The British Standards Institution (BSI) has a scheme to certify businesses that have achieved a certain standard of quality management. Achieving the standard is one way of showing customers and regulators that you take quality control seriously.
Stock control administration
Stock can tie up a large slice of your business capital, so accurate information about stock levels and values is essential for your company's accounting.Figures should be checked systematically, either through a regular audit of stock
If the figures don't add up, you need to investigate as there could be stock security problems or a failure in the system.
2. Fixed interval between orders.
For this system, the interval between orders is constant. This system is best suited for production of X-group (XYZ-analysis).
3. Fixed periodicity of replenishment inventories to a constant level.
This system is a combination of the two systems: fixed batch quantity and fixed interval between orders. This system assumes formation of an order at the threshold level and also formation of an order between intervals. This system is best suited for production of Z-group (XYZ-analysis).
The basis for this system is to minimize the supply of their high cost compared with the cost of storage. So, in these conditions, the slightest probability of shortages of goods in stock will be in storage product groups X or Y, where Y group products should be stored under these conditions, only at very high cost of delivery. The calculations is possible to take that group X is rational stored with this system, if the ratio of "the cost of shipping / storage units per day" is 2000 ... 5000, and Y group - if the ratio is more than 5,000.