How ICT can aid Stock Control

ICT can have different uses in Stock Control:


Scanning bar codes means stock records are updated immediately on receipt or
issue of stock

Managers can identify best sellers and non movers easily

Managers can obtain the total stock figure at any time of the day

Can identify which products sell best at certain times of the day or year

Computer can be linked to the supplier resulting in product being automatically recorded when re-order level is reached

Spreadsheets could be used to record information and totals and balances will be calculated using formulae

Fax/email allows accurate orders to be placed

Understocking and Overstocking

Understocking
Cannot cope with unexpected changes in demand
Production line may have to stop – therefore firm is paying an idle labour force
Cannot meet customers’ orders so they may choose to go elsewhere
Increased administration costs if firm is frequently re-ordering

Overstocking
High costs of storage and maintenance
High insurance costs
Possible need for security measures
Large amount of space needed
Money is tied up in stock which could be used elsewhere
Stock may deteriorate or become obsolete
Safe disposal incurs extra cost

This answer was taken from the 2005 Higher BM paper, so remember to expand!