Chapter 27 – Stock Handling and Inventory Control



Chapter 27 – Stock Handling and Inventory Control

Objectives 27.1

The need for stock handling is to handle and organize inventory. The steps include receiving goods, checking them, marking the goods with information and transferring them to a sales area. Items need to be compared to the receiving record or apron and then it is labeled and inspected for damage and correctness. The four methods of checking are: blind check, direct check, dummy invoice check and spot check. Marking the merchandise can be done so that items can be moved to the sales floor. This can be done by two methods: source marking or preretailing marking methods.

Terms 27.1

• Receiving record – a form used to describe the goods received by a business

• Blind check method – a list made from an invoice of only style numbers and descriptions.

• Direct check method – merchandise is checked directly against the actual invoice

• Dummy invoice check method – a count is made a similar invoice and descriptive information is omitted

• Spot check method – random check of one cartoon in a shipment.

• Source marking- manufacturer marks price before delivering merchandise to the retailer

• Preretailing marking method – pricing information is marked in advance by the seller or the buyer on the retailer’s copy of the purchase order

Objectives 27.2

Inventory management is the process of buying and storing merchandise for sale while controlling costs for ordering, shipping, handling and storage. There are two types or unit control inventory systems: perpetual and physical. Perpetual inventory system tracks the number or items in inventory on a constant basis. Physical inventory is a visual inspection or actual count to determine the quantity on hand. Technology has allowed for a more efficient inventory management system and increased business profits.

Terms 27.2

• Dollar control – represents the planning and monitoring of the total inventory investment that a business makes during a stated period of time.

• Unit control – refers to the quantities of merchandise that a business handles during a stated period of time.

• (SKU) Stock keeping unit – in a unit inventory control system, each item or a group of related items is referred to as an (SKU).

• Perpetual inventory system – tracks the number or items in inventory on a constant basis. Physical inventory system – is a visual inspection or actual count to determine the quantity on hand.

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