SITXINV004 CONTROL STOCK – Short answer

ASSESSMENT B – SHORT ANSWER

INSTRUCTIONS
 You are to answer all questions.
 Read each question carefully. Ensure you have provided all required information.
 On completion, submit your assessment to your assessor.
 To achieve a successful outcome of these questions the minimum correct answers required is:
 Section 1 - 10/12 correct
 Section 2 - 7/9 correct
 Section 3 - 14/17 correct
 Section 4 - 5/6 correct
 Section 5 - 10/13 correct
 Learners have access to the complaints and appeals process as per AAMS student hand book
 Reasonable adjustment will be provided for students with a disability or learning difficulty according
to the nature of the disability or difficulty. Reasonable adjustments are made to ensure that the
student is not presented with artificial barriers to demonstrating achievement in the program of
study. Reasonable adjustments may include the use of adaptive technology, educational support
alternative methods of assessment such as oral assessment.

SECTION 1: MAINTAIN STOCK LEVELS AND RECORDS

Q1: List four general capabilities, features and functions of computerised stock control
systems.

ANS:
1. Maintain stock levels and records
2. Minimise stock losses
3. Process stock orders
4. Follow up orders

Q2: What is an imprest system and when is it commonly used?

ANS: The most well-known utilization of this framework is for unimportant money. An imprest
framework implies that a settled sum is held and, after utilize or a timeframe, it is recharged
back to unique sum. For instance, negligible money is $200.00. Toward the finish of consistently
or month, cash is added to the unimportant money tin to restore the sum to $200.00.

Q3: Describe how manual or electronic bin card systems are used to record and track stock
levels.
ANS:

 A bin card records the comings and goings of all stock. This makes it easy to see if
you’re getting low on supplies.
 There’s a separate bin card for every stock item.
 Each bin card shows the desired minimum level. This is called the ‘par level’. It’s the
minimum amount of the item needed on hand on any given day. Management
determines this level based on the item’s trading history.

1
V 2016
SITXINV004 CONTROL STOCK – Short answer

 When the item gets near the minimum level, reorder it to the maximum level to make
sure you don’t run out.

Q4: Identify three ways you can monitor and maintain stock levels to prevent over- or under-
supply.
ANS:

 Keep track of the stock on hand by regularly counting it.

 Identify your minimum stock levels of particular items. This number represents the
minimum amount of stock that should be on the shelf at any given time.
 Place an order for stock as soon as it reaches its minimum level.

Q5: A new staff member has just joined the team. Provide six tips on what stock information
they can use to monitor and order stock.

ANS:
 Stock description (item name and brand).
 A stock reference number and barcode number for the individual items.
 Size of stock (weight, volume, number of items).
 The value of opening stock (glossary).
 Cost and selling price of items on hand.
 Actual quantity and dollar value of stock on hand and in storage.

Q6: You also need to coach the new staff member on how to maintain records and reports on
stock levels. List six actions they’re required to take.

ANS:
 Use computer programs to update and maintain stock records and create accurate
reports according to your organisation’s procedures.
 Check computer-generated records and reports for accuracy, interpret the information
and look for discrepancies.
 Manually count and order stock using an electronic scanner.
 Record discrepancies between actual stock on hand and book value following a stock
count.
 Ensure you’ve actually received stock from suppliers before issuing payment.
 Ensure that any stock under your control is sold at the correct price.

2 2016 Edition
 SITXINV004 CONTROL STOCK – Short answer

Q7: List six stock records you might need to monitor and maintain if you work in a large
establishment.
ANS:
 ? Stock prices
 ? Stock ordered
 ? Stock received
 ? Stock damaged or lost
 ? Stock in storage off-site
 ? Stock transferred between your establishment and others in the chain

Q8: List the information included on a stock usage report.

ANS: Stock usage report covers a period of time, you and your staff should never wait until
one’s required to document stock usage. Always update the report whenever stock is accessed.
For example, if someone gets a bag of flour from the dry store, you must immediately document
this in the relevant issuing record. Keep issuing records at the main store’s area. Whenever
someone signs out an item, they must include information about the stock type, the amount or
weight, the date and their name. This allows management to account for stock used and also
identify stock that needs re-ordering.

Q9: Monitoring stock performance helps you identify and report fast- and slow-moving items.
Look at the data below. Identify which stock is selling fast and which is selling slowly.
Total sales of beer X over a six-month period was $24,000.
The value of opening stock was $33,000.
The value of closing stock was $3,000.

Total sales of beer Y over a six-month period was $24,000.

The value of opening stock was $40,000.
The value of closing stock was $26,000.

ANS:
Step 1 - Calculate the stock’s average value
Before you can calculate the rate of stock turn, you need to work out the average value of the
stock.

Opening stock + closing stock ÷ number of months or weeks in the period = stock’s
average value
Beer X: $33,000 + $3,000 ÷ 6(months) = $6,000
Beer Y: $40,000 + $26,000 ÷ 6(months) = $11,000

Step 2 - Calculate the rate of stock turn

Total sales ÷ stock’s average value = rate of stock turn
Beer X: $24,000 ÷ $6,000 = 4
Beer Y: $24,000 ÷ $11,000 = 2.18

This means that the fast selling item is beer Y and slow selling item is beer X.

3
V 2016
SITXINV004 CONTROL STOCK – Short answer

Q10: What is a stock reorder cycle?

ANS: They’re designated, daily, weekly, fortnightly or monthly cycles for reordering stock. You
may need to adjust stock reorder cycles depending on stock usage and performance to ensure
that an ideal quantity of stock is on hand between orders.

Q11: Describe how you would monitor reorder cycles so you know when to adjust them.
ANS: Keep in mind, too successfully control and screen reorder cycles, you should be
acquainted with the items in your general vicinity. Frequently check the reorder cycle to see that
it's working. To do this, watch out for stock records, for example, receptacle cards and use
reports, consistently ascertain the stock turn rate, and include the stock work and capacity
territories frequently. You may need to alter the reorder cycle in view of this data. It might mean
changing the measure of stock requested or the recurrence of the request. Whichever is the
situation, any adjustments ought to be imparted to whatever remains of your group.

Q12: You need to delegate some ordering responsibilities to a team member. Describe how you
would do this, including any training or coaching you’d provide to demonstrate good
teamwork skills.
ANS:
 If you choose to delegate tasks to staff, make sure they’re well informed about their
individual stock ordering responsibilities.
 Coach them on completing and interpreting stock control records and remind them to
keep stock records legible and accurate.
 Monitor their work for accuracy. In particular, check their counting of stock on hand
and quantities of stock ordered.
 Monitor staff time management. If necessary, re-organise duties to help them meet
timeframes.
 Provide training in using ordering equipment Ensure staff are familiar with the
reorder cycles and adhere to them.

SECTION 2: PROCESS STOCK ORDERS

Q13: What are the names of two documents that contain information on negotiated cost of
supply and other contractual arrangements between your organisation and preferred
suppliers?
ANS: It's an arranged legally binding game plan between your association and providers,
producers or conveyance organizations. It guarantees that the items and administrations you
buy today will in any case be accessible tomorrow at a similar value, quality, and lead time with
a similar guarantee and conveyance conditions. This understanding keeps up the consistency
and sureness of stock requesting and conveyance. This is essential when growing new menus,
presenting new items (an occasion bundle, occasion stock) or administrations (cloth cleaning,
pool upkeep) and when estimating deals.

Q14: Describe the difference between an order form and an internal requisition form.
ANS:
Internal requisition: Large establishments with a separate purchasing department and stores
area use internal requisitions or transfers.

4 2016 Edition
 SITXINV004 CONTROL STOCK – Short answer

It’s like having an internal supermarket. The requisition replaces cash and lets each department
draw goods from shared storage or other departments.

Every time you need stock (whether one item or 55!), you must fill out a requisition. That way,
this cost can be itemised to establish total expenditure for your department.
Order form this form is carbonised for multiple copies (duplicate or triplicate). Fill it out every
time you place an order with each supplier.

o Send the original copy to the supplier.

o Keep one copy as your record.
o In a large operation, send one copy to the finance department to keep as a record.

Q15: Describe three features and functions of computerised ordering systems.

ANS:

 They can be customised to suit a range of industry needs.

 They generate a range of reports at the touch of a button with up-to-the-minute
accuracy.
 They monitor sales of all individual stock items and can alert you to low stock levels
as they occur.

Q16: Which ordering method would you use in the following situations? Write/select PAR or JIT
or BOTH.
You’re ordering seafood, but have very little storage space for it. JIT
You’re ordering bars of soap and have plenty of storage space. PAR
You’re ordering a special cheese which has a long lead time. JIT
You have a minimum stock level you want to keep on hand. PAR
You only have refrigerated storage space for a day’s worth of stock. JIT

Q17: You work at a resort. The lead time for a special biodynamic organic yoghurt is an average
of two days. Daily usage rate is 5 kg. To be safe, you’d like to always have 15 kg on hand
(three days’ worth). For budgetary and storage reasons, the maximum you’re allowed to
have on hand is 30 kg.
What is your reorder point? : - Lead time (in days) x daily usage rate + safety level =
reorder point (par level)
2 x 5 + 15 = 25
To ensure continuous stock supply you need to reorder once the stock level reaches the par
level of 25 units.

How much do you order? : - Maximum level – par level = order quantity
30 – 25 = 5

Q18: List the three steps for purchasing stock.

5
V 2016
SITXINV004 CONTROL STOCK – Short answer

Step 1: Identify what stock you require and when it needs to be delivered.
Step 2: Prepare an order for each supplier.
Step 3: Contact the supplier to place the order manually or electronically using one of the
following methods.

o Email
o On-line
o Telephone
o Face-to-face
o Fax
o Post

Q19: List the steps you take to process a delivery and identify discrepancies between your
order and the stock that’s been delivered.
ANS:

 Check that the delivery is for your workplace before the driver unloads it.
 Verify the date.
 Check your copy of the order against the supplier’s delivery documentation so you can
make sure they’ve delivered what you asked for.
 Check the stock itself (count number of items, cartons, pallets, etc.) against the
purchase and supply agreements as well as the supplier’s delivery note or invoice so
you can check that nothing is missing. This ensures you’ve sighted all stock and it’s all
been delivered. You don’t want to pay for stock that didn’t arrive!
 Likewise, you don’t want to pay for items that aren’t up to scratch. So you need to
multitask and check for damage or quality problems while you’re counting stock.

Q20: Explain how you would record details of incoming stock and any discrepancies you
identify.
Ans: You and your staff must record any stock-related discrepancies you identify. Consult your
organisation to learn their specific procedures. Most require you to write problems on the
delivery note or invoice, often in front of the driver.

Tick the items you accept (those that are in correct quantity and of good quality) on the
delivery documentation.
Cross any missing items off the delivery documentation.
Cross any items you reject off the delivery documentation. This includes damaged, spoiled or
otherwise deficient, unacceptable stock.
Cross stock off even if it will be redelivered later. New documentation should accompany the
next delivery.
Immediately note stock-related discrepancies (details of missing, deficient or excess items)
on the appropriate place on the delivery documentation.

Q21: Which areas of your establishment should you monitor to ensure stock is secure?
Ans: We should monitor the dry storage, refrigerated storage and also the security measures to
make sure that the stock is secure.

6 2016 Edition
 SITXINV004 CONTROL STOCK – Short answer

SECTION 3: MINIMISE STOCK LOSSES

Q22: Identify eight security systems or equipment used to protect stock.

Ans: eight security systems or equipment used to protect stock are:

Security tags
Dummy tags
Radio frequency identification (RFID) tags
Disposable EAS tags
Reusable EAS tags
Alarm system

Q23: Identify two procedures you can use to render electronic article surveillance (EAS) tags
inactive at point of sale.
Ans:
 You deactivate them at point of sale with a fixed or mobile scanner.
 In the past, you always had to touch the scanner to the tag to deactivate it.

Q24: List four things you should check for when inspecting stock in storage areas.
Ans: List of four things you should check

1. Check quality
2. Track slow moving stock
3. Look for worn or faded stock
4. Check for pests

Q25: Provide five examples of avoidable stock losses.

Ans: five examples of avoidable stock losses are:

Damaged, spoiled or decayed stock.

Stock past its use-by or expiry date and no longer useable or saleable.
Stock infested and contaminated by insects, vermin or other pests.
Excess stock that isn’t used or purchased and goes to waste.
Stock contaminated by other stock.
Physical shrinkage of goods sold by weight or volume (moisture loss, evaporation, etc.).
Stock that’s stolen or vandalised.

Q26: List ways you can record and report on stock losses.
Ans: Every organisation is different. Learn what you need to do in yours. Here are some
common methods.

Use manual shrinkage recording systems such as shrinkage sheets to record unsaleable
stock. They provide a record of a loss or partial loss and allow managers to adjust
records accordingly.
 Use electronic scanners, barcodes and APNs (Australian Product Numbers) to update
computer records.
How do you report: You and your staff may need to report losses on a Wastage Sheet or
Kitchen / Store Spoilage Report depending on your organisation’s procedures.

7
V 2016
SITXINV004 CONTROL STOCK – Short answer

Name of Quantity Reason Unit cost Total cost Who Signed

item for reported
disposal
17/08/X Bath 1 Hole in $6.50 $6.50 Jason Jenny
X mat corner, Bright Masters
frayed
edges

State the reasons for the stock losses in questions 27 to 32.

Q27: Frozen seafood defrosts and spoils.

Ans: Somebody turn off the freezer by mistake

Q28: Yoghurt is held past its use-by date.

Ans: First in First out procedure had not been used

Q29: Mice have chewed through bags of sunflower seeds.

Ans: No body check for any signs of mice and their shit.

Q30: Meat drippings contaminate a cheesecake.

Ans: packing was not checked properly when stored.

Q31: Gourmet cheese is stolen from the delivery dock.

Ans: Alarm is turned off by someone.

Q32: What is the main purpose behind rotating, maintaining and replenishing stock?
Ans: The main purpose behind this is proper supply of without any discrepancies for example
expired stock, no spoiled stock, no stock contamination, no excess stock, no stolen stock or
physical shrinkage.

Look at the losses in questions 33 to 36. Describe solutions you would recommend or
procedures you would implement to protect stock and prevent these losses from happening
again.

Q33: Contents of the freezer have defrosted and melted.

ANS: If your refrigerator is freezing food, the temperature is set too low. Raise the temperature
a few degrees to fix the problem.

Q34: Milk has passed its use-by date and gone sour.
ANS: Separate the items which are expired

Q35: Breakfast cereals are infested with moths and larvae.

8 2016 Edition
 SITXINV004 CONTROL STOCK – Short answer

ANS: Throw away any food packages that can’t get wet (like, boxes and bags) – the moths will
lay eggs in any crevice, including the folds of packages. If the infestation is severe, or if you’re
having trouble getting rid of them, just go ahead and throw away everything.

Q36: Food has been contaminated from cleaning chemicals stored above it.
ANS: Food and other perishable items, chemicals, flammables and some equipment should be
stored or distributed immediately. They have strict WHS or food safety procedures you need to
follow, or the stock may be valuable and must be protected.

Q37: How often and when should you check the quality of stock and look for slow-moving
items?

ANS: If the idea of only checking once a month makes you sick—meaning you just outed
yourself as someone who checks by the hour or day—begin by checking once a week.
Then over time advance to checking once a month.
Now there could be unique situations—maybe when you’re looking to buy or sell an individual
stock—where it’s helpful to keep your eye on the price each day to make a move. Perishable
items are subject to spoilage and wastage, which affects the cost of food and overall profits.
Identifying slow moving perishables and other items of stock ensures you minimise waste.

Q38: Staff members are stealing stock by placing it in their personal bags before they leave the
premises. Describe two security procedures you could implement to reduce staff theft of
this kind.
ANS:

 Random checks of the register terminal.

 Spot checks on prices entered into the register.
 Mystery shoppers (glossary) ensuring staff follow correct procedures.

SECTION 4: FOLLOW UP ORDERS

Q39: State four ways you can monitor the delivery of stock.
ANS: To ensure agreed deadlines are met! You need a continuous supply of stock to deliver
high quality customer service. It’s your responsibility to monitor the progress of orders, liaise
with suppliers and resolve any routine problems that may affect continuity of supply. Remember,
your goal is to ensure that the stock you order is received and available for use when you need
it.

Q40: List six people you could liaise with to ensure continuity of supply.
ANS:

1. Administrative staff such as financial control staff

2. Inward goods staff

9
V 2016
SITXINV004 CONTROL STOCK – Short answer

3. Representatives from freight or delivery companies

4. Warehouse representatives
5. Senior management and purchasing staff
6. Representatives from other departments or sites

Q41: Identify five routine supply problems that might occur.

ANS:
1. High demand for the same stock from other businesses.
2. No stock at the warehouse.
3. Shortages of stock due to weather incidents, wrong season, industrial issues.
4. Deliveries to the wrong location or address.
5. Delivery vehicle breakdown.

Q42: Describe the steps you follow to resolve internal procedural problems that are causing
disruptions to supply.
ANS:

1. Resolving procedural problems in your establishment

 Call a meeting and involve your staff.
 Clearly state the exact problem.
 Brainstorm solutions together.

2. Then choose one of three ways to implement your solution.

Delegate the responsibility of dealing with it to your team. Ensure they follow company
procedures and keep you informed of their progress. Implement the solution yourself if that’s
more appropriate and within the scope of your responsibility.

3. Resolving procedural problems with other establishments

Contact them and discuss the issue to find a resolution as you learned earlier. Simple!

Q43: You must know the product life of the stock you’re responsible for to store it appropriately.
Number these items from 1 to 4 (shortest shelf life to longest).

Whole mango-3 days

Seafood- 2 days
Tinned tomatoes – 1 days
Cooking oil- 4days

Q44: State at least one appropriate storage area for these specific goods.

Fresh, whole eggs: Perishables goods

Canned products: Semi- and non-perishables goods

10 2016 Edition
 SITXINV004 CONTROL STOCK – Short answer

Cleaning chemicals: Housekeeping supplies

Linen: The linen room is usually well ventilated, cool, dry, close to the laundry and easily
accessible to all employees. It may be centralised or decentralised depending on your
organisation.

SECTION 5: ORGANISE AND ADMINISTER STOCKTAKES

Q45: What is a full stocktake?

ANS: You count all stock on a nominated day. In businesses which offer food and beverages,
this usually happens on a monthly basis. A travel agent may only conduct yearly or half- yearly
stocktakes depending on policy.

Q46: What is a cyclical stocktake?

ANS: You break the stocktake up into stages to progressively count all stock at least once
during the course of the financial year. This minimises disruption to customer service and staff
routines. Large organisations often prefer cyclical stocktaking (also known as ‘rolling
stocktakes’) due to the sheer quantity of stock that requires counting.

Q47: What is a spot-check?

ANS: Some establishments carry out stocktakes in the form of a spot check from time to time
for a number of different reasons.

 To maintain stock at par levels.

 To clear up a possible discrepancy.
 To enhance internal security and minimise theft or shrinkage.

Q48: How do you decide at what intervals to organise your stocktakes?

ANS: Arrange your stocktakes at suitable interims as per your foundation's techniques. How
regularly you embrace a stocktake can fluctuate contingent upon the sort of business, the kind
of stock you convey and monetary detailing necessities.

Q49: A new team member is participating in the stocktake. List five questions you should be
prepared to answer about your organisation’s stocktake procedures.
ANS:

 Which areas are included in the stocktake?

 What exactly are the tasks involved?
 Who’s responsible for each task?
 How long do we have to do our tasks?
 What order do we do the tasks in?

Q50: Identify five factors that you need to consider when rostering staff for stocktake duties.

11
V 2016
SITXINV004 CONTROL STOCK – Short answer

ANS:

 Timeframe to complete the stocktake

 Staff numbers you need
 Staff availability
 Your budget (for rostering additional staff or for overtime payments)
 When you’re conducting the stocktake (during or after trading hours)

Q51: What two systems help you produce accurate reports within a given timeframe?

ANS: There are two systems you can use to conduct stocktakes. You can use either of them to
get accurate reports within designated timeframes.

 Computerised systems
 Manual systems

Q52: State the procedures involved in a computerised stocktake.

ANS:

 The computer’s ‘exception report’ facility details variances between count data and
book value.
 The computer generates discrepancy reports (glossary).
 You investigate discrepancies by re-counting any stock included in the exception
report to verify accuracy.
 If the original count is accurate, you need to identify possible reasons for the
variance in your report.

In questions 53 to 57, explain how you would use the documentation to help you create
accurate stocktake reports.

Q53: Stock or count sheets

ANS:
 Use these to document the items you count. They contain more information than other
methods of recording and are usually partly prepared before counting begins.
 If your establishment uses a computerised purchasing system, you can print stock or
count sheets directly from the system.

12 2016 Edition
 SITXINV004 CONTROL STOCK – Short answer

Q54: Count Ticket

ANS:

 Place a count ticket in the position where each item you need to count is stored.
 Staff progressively count the items and fill in the count tickets as they go.

Q55: Stock-taken stickers

ANS:

 Place a coloured sticker or label on each item’s shelf, box or storage container once
you’ve counted it.
 This ensures you’ve counted all the stock (and haven’t counted any stock twice!).

Q56: Shrinkage sheets

ANS:
 Use shrinkage sheets during the stocktake to record stock that’s damaged, soiled, or
past its shelf-life.
 They provide a record of a loss or partial loss and allow you to adjust stock records
accordingly.

Q57: Physical inventory form

ANS:

 Complete this at the end of the manual stock take.

 Document the stock type, size, whether the item has been opened and is partially
used, the quantity and the location.
 Include information on the cost of each unit of stock as well as the total value of each
item.

13
V 2016