A Level Business Revision
00

Stock control and buffer stocks

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Objective: Interpret a stock control diagram, explain the purpose of buffer stock, and analyse the implications of holding too much or too little stock.

Diagram

Reading a stock control diagram

Reading a stock control diagramA saw-tooth stock control chart. Stock level is on the vertical axis and time in weeks on the horizontal axis. Dashed lines mark the maximum stock level at 120 units, the re-order level at 70 units and the buffer stock at 20 units. Stock falls steadily from 120 units at week 0, an order is placed as it passes 70 units in week 4, stock continues falling to 20 units by week 8, and the delivery then returns stock to 120 units.Maximum stock level (120 units)Re-order level (70 units)Buffer stock (20 units)Stock level (units)Time (weeks)020406070801001200481216order placedlead timedelivery arrives
Stock falls steadily as it is used, an order is placed when stock reaches the re-order level, and the delivery arrives after the lead time.