Inventory (Stock) Control Charts

An introduction here to the concept of inventory (stock) control charts as a way of managing levels of inventory. #alevelbusiness #businessrevision #aqabusiness #tutor2ubusiness #alevels #edexcelbusiness #businessalevel VIDEO CHAPTERS 00:00 Introduction 00:11 Main types of stock 00:39 Why use stock control charts? 01:09 Worked example: hoverboard store 05:10 Key parts of a stock control chart 06:07 Factors affecting stock levels and reordering 07:04 Benefits of low / high stock levels VIDEO SUMMARY This video is about stock control charts. Stock control charts are useful for businesses to manage the amount of stock they hold. There are three main types of stock: raw materials and components, work in progress (production that is not yet complete), and finished goods (finished products ready for sale). Stock control charts are particularly useful for raw materials and components, but also very useful for finished goods. The video uses the example of a hoverboard store to illustrate how a stock control chart works. The store buys hoverboards from a wholesaler in the UK. The wholesaler takes a few days to send the hoverboards to the store after the store orders them. The stock control chart has a y-axis that shows the units of stock held and an x-axis that shows the elapsed time in weeks. The chart also has a maximum level, a minimum level, and a reorder level. The maximum level is the highest level of stock that the business wants to hold. In the example of the hoverboard store, the maximum level is 800 hoverboards. This is because the store's storeroom is not big enough to hold more than 800 hoverboards. The minimum level is the lowest level of stock that the business wants to hold. In the example of the hoverboard store, the minimum level is 200 hoverboards. This is the level of stock that the store wants to have on hand in order to avoid stockouts. The reorder level is the level at which the business places an order with the supplier for more stock. The reorder level is set above the minimum level so that the business will have enough stock to last until the new order arrives. In the example of the hoverboard store, the reorder level is 400 hoverboards. This is because the lead time (the time it takes for the wholesaler to deliver the order) is one week. The video concludes by discussing some of the factors that influence how much stock a business should reorder. These factors include the lead time, the implications of running out of stock, and the nature of demand for the product.