Stock Control, Receiving and Storage
This section tests stock records, reorder calculation, receiving discipline, rotation and shrinkage - the numbers and routines that keep shelves full without tying up cash.
Records and calculations
Perpetual systems update stock on every transaction; periodic stocktakes count everything at intervals. Lead time is the gap between ordering and availability. Reorder level = average daily demand × lead time + safety stock. Stockturn = cost of goods sold ÷ average stock at cost; higher turns mean fresher stock and less cash tied up.
Receiving
Check the delivery against the purchase order and the delivery note for quantity, description, condition and dates before signing. Record the goods received note, note damages or shortfalls on the delivery note and raise a credit or returns note, then put away immediately to the correct location and temperature.
Storage and rotation
FIFO (first in, first out) for general goods; FEFO (first expired, first out) for dated and chilled goods. Keep the cold chain unbroken, record temperatures, keep stores dry, ventilated, pest-free and clear of the floor. Shrinkage = loss from theft, supplier fraud, damage, admin error and markdowns; it is why physical counts differ from records.
Worked example
A line sells 40 units a day, lead time is 5 days, safety stock is 100. Reorder level = (40 × 5) + 100 = 300 units. Order before stock falls to 300, or you risk a stockout during the delivery window.
Traps that cost marks
Signing for a delivery before checking it; quoting FEFO where no dates exist; forgetting shrinkage when reconciling a stocktake; and confusing markdown with shrinkage - a markdown is a planned price cut, not a lost unit.