LG - THHGAD0153A

CONTROL AND ORDER STOCK

LEARNER’S GUIDE
CONTROL AND ORDER STOCK

Published by

HEART TRUST/NATIONAL TRAINING AGENCY

Produced by

TVET Resource Centre Gordon Town Road Kingston 7 Jamaica W.I.

*** 2003***

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CONTROL AND ORDER STOCK

LEARNER’S GUIDE

 2003 HEART Trust/NTA Kingston Jamaica

This material is protected by copyright. Copying this material or any part of it by any means, including digital or in any form is prohibited unless prior written permission is obtained from the HEART Trust/NTA.

Design and Development work done by the Learning Resource Unit of the TVET Resource Centre

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CONTROL AND ORDER STOCK

TABLE OF CONTENTS
PAGE Introduction.......................................................................................................................... Welcome ................................................................................................................... This Competency Unit.................................................................................................... Before You Start ............................................................................................................. Planning Your Learning Programme ............................................................................. Self-Assessment Checklist ............................................................................................. How To Use This Learner’s Guide ................................................................................ Using the Computer and Other Resources..................................................................... Method of Assessment.................................................................................................... Element 1: Maintain stock levels and records................................................................... Self-Assessment Checklist ........................................................................................... Element 2: Organise and administer stocktaking............................................................. Self-Assessment Checklist ........................................................................................... Element 3: Identify stock losses ........................................................................................... Self-Assessment Checklist ........................................................................................... Element 4: Process stock orders .......................................................................................... Self-Assessment Checklist ........................................................................................... 1 1 1 2 2 2 4 6 6 7 11 12 14 15 17 18 20

Element 5: Follow up orders ................................................................................................ Self-Assessment Checklist ...........................................................................................

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CONTROL AND ORDER STOCK

INTRODUCTION Welcome Welcome to the Learner’s Guide for Unit of Competency “Control and Order Stock”. This is just one of a number of Learner Guides produced for the Commercial Food Preparation Skills stream of the Tourism and Hospitality Industry, and it is designed to guide you, the learner, through a series of learning processes and activities that will enable you to achieve the specified learning outcomes for the competency unit. The content of this guide was developed from the Competency Standard THHGAD0153A which is one of the basic building blocks for the National Vocational Qualification of Jamaica (NVQJ) certification within the industry. Please refer to your Learner’s Handbook for a thorough explanation of standards and competencies, and how these relate to the NVQJ certification. This Competency Unit “Control and order stock” addresses the knowledge and skills requirements for effectively selecting, preparing, controlling and ordering stock. Five elements are presented: Element 1: Element 2: Element 3: Element 4: Element 5: Maintain stock levels and records Organise and administer stocktaking Identify stock losses Process stock orders Follow up orders

You are also advised to consult the Competency Standard for a better understanding of what is required to master the competency.

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Before you start Before you start this Learner’s Guide you need to: a. Obtain a Learner Logbook that will be used to record evidence of your new skills/competence. As you demonstrate your new skills, record your activities and have your learning facilitator sign off on them. This will allow you to provide evidence of your competence when you are being assessed against the competency standard. b. Ensure that you have access to the facilities and equipment necessary for learning. c. Ensure that your learning resources are available. d. Know and observe the occupational health and safety standards/practices for the industry. For example, ensure that you are wearing suitable clothing, that tools and equipment are safe, and that the correct safety equipment is used. e. Plan you learning programme (see below) f. Understand how to use this Learner’s Guide (see below) Planning you learning programme The following self-assessment checklists will assist you in planning your learning programme as they will help you to think about the knowledge and skills needed to demonstrate competency in this unit. As you go through each one you will be able to find out what competencies you already have and what competencies you will need to pay more attention to as you go through the learning process. To complete the checklists simply read the statements and tick the ‘Yes’ or ‘No’ box. Self-Assessment Checklist - Control and order stock

Element 1 1. 2.

Maintain stock levels and records

Yes ___

No ___ ___

I can monitor and maintain stock level as prescribed by enterprise

I can monitor and adjust stock security systems as required ___

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3. 4. 5.

I can monitor and adjust stock re-order cycles as required ___ I can maintain stock storage and records in accordance with enterprise procedures I can maintain stock performance and identify fast/slow selling items in accordance with enterprise procedures ___ ___

___ ___ ___

Element 2 1. 2. 3.

Organise and administer stocktaking

Yes ___ ___ ___

No ___ ___ ___

I can organise stocktaking at the appropriate times and allocate responsibilities to staff I can identify typical stocktaking procedures as appropriate to industry sector I can prepare accurate reports on stocktaking

Element 3 1. 2. 3.

Identify stock losses

Yes ___ ___ ___

No ___ ___ ___

I can identify avoidable losses and establish reasons for loss I can follow the procedure to report losses I can recommend and implement solutions to prevent future available losses

Element 4 1. 2. 3.

Process stock orders

Yes ___ ___ ___

No ___ ___ ___

I can process order for stock accurately and in accordance with enterprise procedure I can maintain stock ordering and recording systems accurately I can use purchase and supply agreements and record the appropriate detail

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Element 5 1. 2. 3.

Follow up orders

Yes ___ ___ ___

No ___ ___ ___

I can monitor the delivery process to meet agreed deadlines I can liaise with colleagues and supplier to ensure continuity of supply I can distribute stock in accordance with agreed allocations

If you ticked all or most of the ‘Yes’ boxes, then you might not need to go through the entire guide. Ask your learning facilitator to assist you in determining the most appropriate direction for this competency. If you ticked few of the ‘Yes’ boxes or none at all, then you should work through the entire guide, even though some of the materials may be familiar to you. Plan your learning based on your answers. Be sure to involve your learning facilitator in the planning process. How to use this Learner’s Guide This Learner’s Guide is designed to assist you work and learn at your own pace. We suggest that you: • • • Go through the sections/elements as they are presented (starting at Section 1) Check your progress at each checkpoint to ensure that you have understood the material Observe the icons and special graphics used throughout this guide to remind you of what you have to do and to enhance your learning. The icons and their meanings are as follows: Complete Assessment Exercise Requires you to think about the knowledge and skills that you have or will develop in this competency unit.

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Definition Box Words/phases are defined or explained in this box. The words/phases being explained are in bold print.

Checkpoint This denotes a brain teaser used to check your understanding of the materials presented. No answers are provided for the questions asked.

Activity This denotes something for you to do either alone or with the assistance of your learning facilitator.

Reference Points you to the reference materials and other support documents or resources used in compiling the unit content.

• •

Ask your learning facilitator for help if you have any problem with the interpretation of the contents, the procedures, or the availability of resources Stop and complete each activity as you come to it. If the activity requires you to perform an actual task, be sure to tell your learning facilitator when you get to that activity so he/she can make any arrangements Get your learning facilitator to sign and date the Learner Logbook when you have completed an activity Read the summary and complete the self-assessment checklist at the end of each section or element.

• •

When you have worked through all sections of the guide, complete the assessment exercise at the end of the document. When you can tick every ‘Yes’ box, you are ready for assessment and may ask your learning facilitator to assist you in making the arrangement to have your performance assessed.

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Using the Computer and Other Resources Where your activities refer you to the library, computer and Internet resources, ask your learning facilitator to assist you with locating these resources. If you are getting your training in an institution, there may be a library and computer laboratory. If this is not the case, visit the local library and find out what resources are available. If you are new to the computer and the Internet, someone should be able to show you how to use these resources. Please note that in many of your activities you have been referred to information on the Internet. This is because the Internet has a vast amount of information that can help you in acquiring the particular competencies. We would like to advice you, however, that we cannot guarantee that all the sites will be available when you need them. If this happens, ask your learning facilitator to assist you with locating other sites that have the information you require. Method of Assessment Competency will be assessed while work is undertaken under direct supervision with regular checks, but may include some autonomy when working as a team. You are advised to consult the associated competency standard for further details related to the assessment strategies. You may now start your learning. Have fun while you work!

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ELEMENT 1:

MAINTAIN STOCK LEVELS AND RECORDS

LEARNING OUTCOMES

As you go through this element you acquire the necessary knowledge, skills and attitude needed to maintain stock levels and records. Your learning facilitator is there to assist you with different activities. On completion you should be able to: 1. 2. 3. 4. Monitor and maintain stock levels as prescribed by enterprise Monitor and adjust stock security systems as required Maintain, monitor and adjust stock reorder cycles as required Inform colleagues of their individual responsibilities in regard to recording stock 5. Maintain stock storage and movement of records in accordance with enterprise procedures 6. Monitor stock performance and identify and report fast/slow selling items in accordance with enterprise procedures

MONITOR AND MAINTAIN STOCK LEVELS

Re-order point - the inventory/stock position when a new order should be placed. Each company has to determine the level of stock it wants to carry. Once determined, systems must be put in place to monitor and maintain them. • • Stock movement may be tracked manually and an order placed when the reorder point is reached, as indicated by entries on the stock card. Manual tracking requires that the stock clerk be alert and make daily checks on his stock. They are many software applications available to monitor stock electronically. Once various critical points are determined and entered, these systems automatically alert you to changes that need your attention. Your computer will tell you (a) which item needs to be re-ordered now (b) what product’s shelf life has expired (c) the products that are too long in the inventory (d) prints ,purchase requisition and orders will give you reminder regarding time frame

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CHECKPOINT: Why is it important to monitor stock levels? What is the likely result of stock levels falling below the lower limit?

STOCK SECURITY SYSTEMS

Bar code - UPC/ Universal Product Code identifies storage information on a product/item.

• • • • •

Unique number or bar code assigned to stock item/product for identification. Records are kept of receipt and/ or deliveries of any item into or out of stock Product is removed from stock only on receipt of properly completed goods requisition form Unauthorised persons are not allowed into stock room Stock is stored or moved in accordance with FIFO (first-in first-out)

Monitor and adjust stock re-order cycles Although stock levels are pre-determined, and the order quantity and cycles determined by applying the EOQ inventory model and might make it necessary to adjust to order quantity and re-order cycles based on: • • • • • Movement of stock item owing to faster or slower usage Spoilage Breakage Menu changes Seasons

Stable or improved inventory costs are a result of continuous monitoring and appropriate and timely adjustments.

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Colleagues- responsibilities and stock records For any system to function efficiently all parties involved must be aware of and respect the terms and conditions of service. Whenever stock is purchased, received, requested from storage, delivered, dumped or disposed of, no matter the manner, the appropriate forms/cards or data entry must be made or completed. Maintain stock storage and movement records Record keeping is an important aspect of stock control. It provides for the accounting department, the inventory cost and pricing information they usually require. It also eliminates the need to count stock each time stock is added or removed. Entering stock movement as soon as it occurs ensures a perpetual record is available. Periodic stock counts confirm stock record balances and identify overages or shortages.

CHECKPOINT: Give reasons record keeping is necessary for proper stock control?

Monitor Stock Performance Stock performance should be monitored consistently. As management tools, records should be kept current. Fast/slow selling stock should be reported to the relevant authority/purchasing officer, adjustments to the order frequency or order quantity. The production department should also be informed as the stock level in production changes.

CHECKPOINT: What do FIFO and EOQ mean? How are they used in stock control?

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ACTIVITY: Ask your learning facilitator to help you review records being used in your institution to control and order stock. You should be provided with practical examples. Complete copies of different requisition forms/letters used and write a report on how stock records facilitate control and traceability of stock within your organisation.

Pay attention to the stock item description

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READY TO PROVE YOUR COMPETENCY? Now that you have completed this element, see if you have fully grasped all the components by doing the following Self-Assessment. Checklist 1 Yes 1. 2. 3. 4. 5. I understand how to monitor and maintain stock levels as prescribed by enterprise I understand how to monitor and adjust stock security systems as required I understand how to monitor and adjust stock re-order cycles as required I understand how to maintain stock storage and movement records according to enterprise procedures I understand how to maintain stock performance and identify fast/slow-selling items in accordance with enterprise procedures ___ ___ ___ ___ No ___ ___ ___ ___

___

___

Checklist 2 Yes 1. 2. 3. 4. 5. Stock levels are maintained and monitored as prescribed by enterprise Stock security systems are monitored and adjusted as required Stock storage and movement records are maintained according to enterprise procedures Fast/slow selling items and stock performance are maintained and identified Colleagues are informed of individual responsibilities in regarding to recording of stock ___ ___ ___ ___ ___ No ___ ___ ___ ___ ___

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ELEMENT 2:

ORGANISE AND ADMINISTER STOCKTAKES

LEARNING OUTCOMES

As you go through this element you need to ensure that you acquire the necessary knowledge, skills and attitude needed to organise and administer stocktaking. Your learning facilitator is there to assist you with the different activities. On completion you should be able to: 1. Organise stocktakes at the appropriate time and allocate responsibilities to staff 2. Produce within the designated timelines accurate reports on stocktake data 3. Identify standard stocktaking procedures

ORGANISE STOCKTAKES

Stocktaking: the listing and counting of items in stock Periodic stocktaking is usually requested by the accounting department.. The data obtained from the exercise is used in the preparation of the company’s financial statements and for costing of the stock items or products in which stock items are used. Organising a stocktake: • • • • • • • Identify stock to be counted Confirm location of stock Assemble stocktaking team Instruct team on method to be used for exercise Prepare tools (paper, pencils, pens, inventory list, gear, etc. Advise auditors, if stipulated Confirm date, time and place for stocktaking

The stock control personnel may do stocktaking on an ad hoc basis to verify particular item(s).

CHECKPOINT List some stocks that may be included when doing stocktaking. How you would organise stocktaking in a linen room

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Stocktaking Reports As soon as stocktaking is completed, data must be collated, re-checked and compared and a report submitted in the form required by the enterprise/company. Stocktaking Procedure

• • • • • • •

A stock list is prepared with the items usually stocked. The stock is located The identifying marks are compared with that on the list The stock is counted /weighed and recorded Have team members verify count or weight. Team members usually work in pairs. The stocktake data is collated A report is prepared and presented to relevant body. Make adjustments (overages or losses) to stock record once authorisation is obtained from the relevant body, e.g. accounts.

Pay attention to detail when organising stocktaking CHECKPOINT Give reasons a company practices periodic stocktaking?

ACTIVITY Discuss with your learning facilitator the organising and holding of a stocktaking exercise by the class. You may suggest organising the stock in a dry ingredients storage area or in a cold room stock. Outline your plan of action and identify what is required of each participant. Estimate how much time you would need to carry out this exercise. Submit a report of the stocktaking to your learning facilitator.

Reference; LG THHGAD0141A Receive and store stock Anderson, David R., Sweeney, Dennis T. & Williams, Thomas A. (1994), Quantitative Approaches to Decision Making 7th Ed. Chapter 2

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ARE YOU READY TO PROVE YOUR COMPETENCY? Now that you have completed this element, do the following Self-Assessment to see whether you grasped fully its component. Checklist 1 Yes 1. 2. 3. I understand how to organise stocktaking at appropriate times and allocate responsibilities to staff I understand how to identify standard stocktaking procedures I understand how to prepare accurate stocktaking reports ___ ___ ___ No ___ ___ ___

Checklist 2 Yes 1. 2. 3. 4. Stocks are organised at appropriate times and responsibilities allocated to staff ___ Stocktaking procedures are identified as meeting industry standards Attention is paid to detail when organising and administering stocktaking Accurate reports on stocktaking data are produced within designated deadlines ___ ___ ___ No ___ ___ ___ ___

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ELEMENT 3:

IDENTIFY STOCK LOSSES

LEARNING OUTCOMES

As you go through this element you need to ensure that you acquire the necessary knowledge, skills and attitude needed to identify stock losses. Your learning facilitator is there to assist you with the different activities. On completion you should be able to: 1. Identify losses accurately, record and assess against potential loss forecasts on a regular basis. 2. Report losses in accordance with enterprise/company procedure 3. Identify avoidable losses and establish reasons for loss 4. Recommend and implement solutions to prevent avoidable losses in the future

IDENTIFY LOSSES

Whether periodic or ad hoc, on completion of a stocktaking exercise, stock losses may be identified. Stock losses are differences between quantity/weight on record and the physical count. Stock losses may be attributed to careless record keeping, breakages/ spillages, pilfering, damage or infestation by pests and incorrect storage. These losses should be assessed and compared with the forecast for potential losses on a regular basis. Such assessment and comparison will inform the financial effect on the operations. Reporting Stock Losses Losses should be reported to the relevant body as soon as they are identified. The report should be submitted according to the procedure stipulated by the enterprise. Where possible, the report should include an explanation for the loss and its cost.

CHECKPOINT: Can you identify potential stock losses? Are they avoidable?

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Avoidable losses Some stock losses may be prevented by exercising due care: • • • • • Breakages Infestation Improper storage Inaccurate record keeping Pilferage

Investigating why avoidable losses occur should be undertaken to prevent their recurrence. Solutions Avoidable losses may be prevented by: • • • • • Staff training Developing and implementing pest control programme Storing products/stock in the recommended environment Securing the storeroom and allowing only authorised personnel to enter or remove stock Re-visiting the lay out of the storeroom and assessing accessibility of stock

CHECKPOINT: Can you calculate the cost of stock losses identified during recent stocktaking?

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ACTIVITY: List the number of avoidable stock losses observed in your institution and submit a report outlining how you would reduce or eliminate such losses. Indicate what savings would be realised if your solutions are implemented. Ask your learning facilitator to assist you with obtaining stock item prices/costs.

ARE YOU READY TO PROVE YOUR COMPETENCY? Now that you have completed this element, do the following Self-Assessment to see whether you have grasped fully all its components. Checklist 1 Yes 1. 2. 3. I understand how to identify avoidable losses and establish reasons for loss I understand how losses are reported I understand how to recommend and implement solutions to prevent avoidable losses in the future ___ ___ ___ No ___ ___ ___

Checklist 2 Yes 1. 2. 3. Losses are reported in accordance with enterprise/company procedures Solutions are recommended and implemented to prevent avoidable losses in the future Avoidable losses are identified, their reasons established and a report made in accordance with company procedures ___ ___ No ___ ___

___

___

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ELEMENT 4

PROCESS STOCK ORDERS

LEARNING OUTCOMES

As you go through this element you need to ensure that you acquire the necessary knowledge, skills and attitude needed to process stock orders. Your learning facilitator is there to assist you with different activities. On completion you should be able to: 1. Process orders for stock accurately and in accordance with enterprise procedures 2. Maintain stock ordering and recording systems accurately 3. Correctly use purchase and supply agreements and record appropriate details

PROCESS ORDERS FOR STOCK

• • • • •

Prepare purchase requisition. Requisition should: display item; identify a supplier; state quantity needed; state cost of item and expected delivery date. Obtain purchase order from designated authority within the enterprise. Check the purchase order to see it accurately reflects the purchase requisition Send purchase order to supplier Check delivery status with supplier

Purchase order: A letter or prescribed form authorising purchase of an item from a supplier.

Be accurate when processing records

Maintain Stock Ordering and Recording Systems • • • • • • A file/copy of the purchase order should be kept As soon as an order is received update the stock control system Update system with changes in specifications, stock number and supplier as soon as notification is received Review high limits and low limits and re-order points All stock movements must be recorded. Do random spot checks to verify records

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Purchase and Supply Agreements

Purchase and supply agreements outline specific terms and conditions of purchases and supplies between individuals or enterprises. They may relate to: • Quantity discounts • Product guarantees • Payments • Method of shipping/transportation • Pricing • Minimum order quantity • Quality • Product usage Details of these agreements must be adhered to when ordering or supplying goods.

CHECKPOINT What are purchase and supply agreements? How would you process an order for 10 cases of dinner plates?

ACTIVITY Draft a purchasing agreement for purchasing kitchen equipment. Ask your learning facilitator to assist/guide you. Make a study of your institution’s stock ordering and recording system. Is it an efficient and effective system? Have your learning facilitator arrange for you to observe at least two other systems operating elsewhere so you will be able to make comparisons.

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Reference: LG THHGAD0141A Receive and Store Stock LG THHCFP0342A Identify and Prepare Meat COMMIS CHEF L2 2001 HEART Trust NTA M1 unit 2 p19-21 Ask your learning facilitator how to access?

ARE YOU READY TO PROVE YOUR COMPETENCY? Now that you have completed this element, do the following Self-Assessment to see whether you have grasped fully its components. Checklist 1 Yes 1. 2. 3. I understand how to process stock orders accurately and in accordance with enterprise procedure ___ No ___ ___ ___

I understand how to maintain stock ordering and recording systems accurately ___ I understand how to use purchase and supply agreements and how to record the appropriate detail ___

Checklist 2 Yes 1. 2. 3. 4. Orders for stock are accurately processed in accordance with enterprise/company procedures ___ No ___ ___ ___ ___

Stock orders and record system are accurately maintained ___ Purchase and supply agreements are appropriately used to record detail Accuracy is displayed when processing stock order ___ ___

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ELEMENT 5

FOLLOW UP ORDERS

LEARNING OUTCOMES

As you go through this element you acquire the necessary knowledge, skills and attitude to follow up orders. Your learning facilitator is there to assist you with the different activities. On completion you should be able to: 1. Monitor delivery process to meet agreed deadlines 2. Liaise with colleagues and supplier to ensure continuity of supply 3. Distribute stock in accordance with agreed allocations.

MONITOR DELIVERY PROCESS

Once the supplier receives the order, and a delivery date is agreed on, the stock controller contacts the supplier at regular intervals to ascertain the status of the order and whether the delivery deadline will be met. Preparations are made to receive and store the goods when delivered.

Liaise with Colleagues and Supplier • • • • •

communicating by fax

Purchase requisition and purchase order are prepared in good time and dispatched to the supplier as soon as possible. Consult with colleagues about the urgency of the order and confirm optimum delivery date. Liaise with supplier and ensure the goods will be available at the specified time Supply agreements are checked Confirm delivery date for any back order

Distribute Stock • • • • Goods requisition order is received by the stock clerk Goods are located and assembled according to requisition Goods are delivered to department or person who requested the goods The stock card is updated to reflect the delivery.

Be careful when delivering stocks

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CHECKPOINT What steps would you take to ensure your order is delivered within agreed deadlines?

ACTIVITY Have your learning facilitator arrange time for you in the receiver and delivery department of your company. Write a report detailing the delivery, receival and storage procedures. Discuss your findings/observations with your learning facilitator.

ARE YOU READY TO PROVE YOUR COMPETENCY? Now that you have completed this element, do the following Self-Assessment to see whether you have grasped fully all it components. Checklist 1 Yes 1. 2. 3. I understand how to monitor the delivery process to meet agreed deadlines ___ No ___ ___ ___

I understand how to liaise with colleagues and supplier to ensure continuity of supply ___ I understand how to distribute stock in accordance with agreed allocations ___

Checklist 2 Yes 1. 2. 3. 4. Delivery process is monitored to meet agreed deadlines Colleagues and supplier have ensured continuity of supply Stock is distributed in accordance with agreed allocations Carefulness is displayed when delivering stock 22 ___ ___ ___ ___ No ___ ___ ___ ___

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