Where only manual methods of stock control are used it is common to find that fast-moving items are under stocked (greater risk and frequency of out-of-stock situations) whereas slower-moving items are overstocked. The Datafile Software stock system tries to help you here too. But first you must define what "overstocked” and "slow-moving” means to your organisation.
You must define two general parameters to the stock System Profiles:
Excess stock number of periods. If you have enough stock to meet demand for the next two years, most people would suggest that you were overstocked — we assume for the moment that supplies are still available! If you had stock only for the next two weeks, then few would suggest you were overstocked.Somewhere in between these two extremes is an arbitrary time period — measured in the time period units defined above — where you probably have more stock than you need keep. Of course, this may depend also on the average length of time that it takes you to obtain new stock in your industry. If supplies are generally slow, then you may prefer to give a longer time period to report excess stock than if stock can generally be obtained in days
Slow moving stock days. This is not so much a question that you have more stock than is needed to meet demand over a pre-defined period, but that there has been no demand at all over a certain period. The time period given here is measured in days, regardless of the time period unit defined above
There are two reports which use these parameters, the Excess Stock report, and the Slow Moving Stock report — both are described in more detail in the User Instructions later.These reports show you where you can reduce your stockholding, either by taking some positive action to move the items, or by returning stock to suppliers where sale-or-return facilities are offered (such as the book trade).
Article ID: 405
Created On: Mon, Jun 18, 2012 at 10:38 AM
Last Updated On: Thu, Jun 22, 2023 at 11:28 PM
Online URL: https://kb.datafile.co.uk/article/over-stocking-and-slow-moving-stock-405.html