Page 108 - DMGT553_RETAIL_STORE_MANAGEMENT

Unit 6: Stock Management

The more stock a store holds the greater the amount of money that is tied up and this can Notes
have a significant effect on company profits.

Different stores have different ways of controlling and ordering new stock.
Stock taking involves making an inventory, or list, of stock, and noting its location and
value. It’s often an annual exercise – a kind of audit to work out the value of the stock as
part of the accounting process.
Codes, including barcodes, can make the whole process much easier but it can still be
quite time-consuming.

Checking stock more frequently – a rolling inventory – avoids a massive annual exercise,
but demands constant attention throughout the year.

Radio Frequency Identification (RFID) tagging using handheld readers can offer a simple
and efficient way to maintain a continuous check on inventory.

6.5 Keywords

Batch control: Managing the production of goods in batches. You need to make sure that you
have the right number of components to cover your needs until the next batch.
Economic Order Quantity (EOQ): A standard formula used to arrive at a balance between
holding too much or too little stock. It’s quite a complex calculation, so you may find it easier to
use stock control software.
First in, first out: This is a system to ensure that perishable stock is used efficiently so that it
doesn’t deteriorate. Stock is identified by date received and moves on through each stage of
production in strict order.
Just In Time (JIT): This aims to reduce costs by cutting stock to a minimum. Items are delivered
when they are needed and used immediately.
New Old Stock (NOS): The stock which is never been sold by the retailer and now not even
being manufactured comprises the new old stock. Such products do not have takers and may not
be produced anymore.

Re-order lead time: It allows for the time between placing an order and receiving it.
Retail Stock: Retail Stock refers to the goods stocked for future use.
Retail Stock management: Retail Stock management refers to the storage of products to be used
at the time of crisis.
SKU: Code which helps in the identification and tracking of the products at the retail store is
called as stock keeping unit or SKU.

Stock out: Stock out refers to a situation when the retailer fails to fulfill the customer’s requirement
due to lack of merchandise.

6.6 Review Questions

1. What is meant by retail stock?

2. Define the term retail stock management.
3. Define SKU.
4. What is meant by NOS?

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