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Unit 6: Stock Management

In the same way B in the second example would stand for Blue. Notes
Simply typing NU – M–40-FL-W would let the retailer know whether the particular
merchandise is available with him or not.

2. New Old Stock (Abbreviated as 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 any more.
3. Stock out: Stock out refers to a situation when the retailer fails to fulfill the customer’s
requirement due to lack of merchandise. The merchandise is not available in the current
Retail Stock and thus the customer has to return home empty handed.

6.1.2 How Much Stock Should You Keep?

Deciding how much stock to keep depends on the size and nature of your business, and the type
of stock involved. If you are short of space, you may be able to buy stock in bulk and then pay
a fee to your supplier to store it, calling it off as and when needed.
Keeping little or no stock and negotiating with suppliers to deliver stock as you need it.

Table 6.1: Advantages and Disadvantages of Keeping Little or No Stock

Advantages Disadvantages
Efficient and flexible – you only have what Meeting stock needs can become
you need, when you need it complicated and expensive
Lower storage costs You might run out of stock if there's a
hitch in the system
You can keep up to date and develop new You are dependent on the efficiency of
products without wasting stock your suppliers

This might suit your business if it’s in a fast-moving environment where products develop
rapidly, the stock is expensive to buy and store, the items are perishable or replenishing stock is
quick and easy.

Keeping Lots of Stock

Table 6.2: Advantages and Disadvantages of Keeping Lots of Stock

Advantages Disadvantages
Easy to manage Higher storage and insurance costs
Low management costs Certain goods might perish
You never run out Stock may become obsolete before it is used
Buying in bulk may be cheaper Your capital is tied up

This might suit your business if sales are difficult to predict (and it is hard to pin down how
much stock you need and when), you can store plenty of stock cheaply, the components or
materials you buy are unlikely to go through rapid developments or they take a long time to
re-order.
Stock levels depending on type of stock

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