Stock Recording, Documentation and Stock Control
What this domain tests
This section checks the paper and digital trail behind stock: which document does what, how stock levels are controlled, and how variances are found and explained.
Core concepts
- Documents: purchase order (what you asked to buy), invoice (supplier's bill), delivery challan (goods sent), GRN (goods actually received), bin card (stock in/out for one location), stock ledger (value and quantity by item), transfer note (inter-store or inter-department), return-to-vendor note, damage/shrinkage report, stock verification sheet.
- Bin card vs ledger: the bin card sits at the rack and tracks quantity only; the ledger is the accounting record and includes value.
- Control levels: minimum level, reorder level, maximum level, safety stock. Reorder level = demand during lead time + safety stock.
- ABC analysis: A items are high value and tightly controlled; C items are low value and loosely controlled.
- Verification: annual physical stock count, periodic cycle counts, variance report, root-cause note.
- Shrinkage causes: theft, damage, expiry, paperwork error, supplier short supply.
Worked example
Daily demand is 10 units, lead time is 5 days, safety stock is 40 units. Reorder level = (10 × 5) + 40 = 90 units. Reasoning: order when stock falls to 90 so that normal demand during delivery is covered, plus a buffer for delays.
Traps that cost marks
- Confusing the bin card with the ledger.
- Forgetting that reorder level includes safety stock.
- Making corrections by overwriting instead of a signed, dated correction.
- Leaving a return or transfer unrecorded, which creates a false variance.