Types of Stock

Problems due to Overstocking

Problems due to Stockout (total depletion of stock)

Stock control charts

Maintaining a balanced stock level is important.  Stock control chart is one of the methods to maintain optimum level of stock at all times.

Stock control chart

Depletion of stocks as a result of usage or sales is represented by the sloping lines. The rate of depletion can be identified from the gradient of the lines. The steeper the gradient, the faster the depletion. When stocks fall to the reorder level, a new batch is ordered. But there is a gap between the order being made and the delivery of supplies, this time gap is known as the lead time. The gap between the minimum stock level and the zero stock level is known as buffer stock.


The following decision need to be taken when managing the stock levels through a stock control chart