Powered by Leeds Metropolitan University
Business Studies Resources Popular resources on the {my channel} blog Resource tags for the blog RSS Feed for the blog Twitter feed for this blog Teacher Email Resource Newsletter Category listing for this blog

Stock control - stock control charts

Author: Jim Riley  Last updated: Sunday 23 September, 2012

A stock control chart is a graphical illustration of a simple approach to stock management over time. This ‘saw tooth’ shaped diagram is normally shown as if sales were steady throughout each month. Whilst this oversimplifies the situation for many businesses, the principles can be adapted to most situations.

The key features and terms are:

  • Maximum stock level – this is the maximum amount of stock a business would wish to hold. This could represent enough stock for a month or a week, it might be as much as the warehouse has space for, or it might depend on the order size needed to qualify for a quantity discount – known as the Economic Order Quantity (EOQ). On the diagram below, the maximum stock level is 600 units, and the usual order quantity is 500 units
  • Re-order level – this acts as a trigger point, so that when stocks fall to this level, the next order should be placed. This helps take account of fluctuations in sales levels over time. When an order is placed, there is a lead time that the supplier needs to meet that order. Ideally this new order will arrive just before stocks fall below the minimum stock level. On the diagram below, 300 units
  • Lead time – the amount of time between placing the order and receiving the stock On the diagram below, just under two weeks
  • Minimum stock level – this is the minimum amount of product the business would want to hold in stock. Assuming the minimum stock level is more than zero, this is known as buffer stock – see below. On the diagram below, 100 units
  • Buffer stock – an amount of stock held as a contingency in case of unexpected orders so that such orders can be met and in case of any delays from suppliers.


Stock control chart


Add your comments and share this study note:

blog comments powered by Disqus


Search tutor2u

Order by 

Related study notes


TBBLE - the Best Business Lesson Ever 2013


Tutor2u support for students
Teaching support and resources
Search for resources on tutor2u


Refine Search by Subject
A Level Economics
Business Studies
Geography Give It A Go!
History Law
IB Diploma Politics
Religious Studies Sociology

Order Search Results By

Follow tutor2u on Twitter

tutor2u Home Page | Online Store | About tutor2u | Copyright Info | Your Privacy | Terms of Use


Working with Our Partners

 Zondle - Games for LearningVue Cinemas | Moneypenny | Nexcess | Really Simple Systems 

Boston House | 214 High Street | Boston Spa | West Yorkshire | LS23 6AD | Tel +44 0844 800 0085 | Fax +44 01937 529236

Company Registration Number: 04489574 | VAT Reg No 816865400

tutor2u is proud to sponsor TABS Cricket Club and the Wetherby Cricket League as part of its commitment to invest in local junior sport