Topic Summaries

Stock (or inventory) refers to the raw materials, work-in-progress, and finished goods held by a business. Managing stock effectively is critical for ensuring smooth production, minimising costs, and meeting customer demand. There are two primary tools used in stock management: bar gate stock graphs, and the just-in-time approach.

• Bar gate stock graphs: a visual way of showing how stock levels change over time. For example, a bakery might use a bar-gate graph to ensure flour is reordered before stock levels fall below the minimum, avoiding disruption to daily operations. These graphs help businesses determine:
  • Minimum stock level: the lowest amount of stock that should be kept on hand.
  • Maximum stock level: the highest level to avoid overstocking.
  • Reorder level: the point at which new stock should be ordered to avoid running out.
  • Lead time: the time between placing an order and receiving the stock.

• Just-in-Time (JIT) stock control: is a lean stock management strategy where materials are ordered and received only when needed for production or sale.This method aims to reduce storage costs and avoid excess inventory