SITXIN004 Control Stock

Assessment 1
Short Answer Questions
Your task: Provide a detailed response to each of the following
questions.
Question 1: List 6 examples of forms that are used in a
manual Control system.
1.1. The temperature and humid controlling form.
1.2. The Electronic and manual record keeping.
1.3. Financial and cash flow record keeping.
1.4. The record of the product life cycle in the stock.
1.5. The list items of in the refrigerator.
1.6. The contact and important regulation of the
company.

Question 2: Why is it important to constantly monitor

your control system?
The important to monitor the control system is to
organize the system in the stock in order to keep all
items with the correct temperature and humid to prevent
the illness from the food and beverage or even products
life cycle that may be expired.

Question 3: List 6 examples of “stock items’ in the

TH&E industry
3.1. The seafood freezer supplier.
3.2. Beverage items.
3.3. Food and fruit supplier.
3.4. The ingredient of food.
3.5. The food cans.
3.6. The chemical of the cleanliness.

Question 4: What does collusion refer to?

 The collusion refer to the firms agreement between two
parties and there is a non-competitive areas to limit
by obtaining the objective the legal rights and deceiving.

Question 5: Why is it important that both the person

responsible for placing order and the ordering process
must be very clear to staff?
It is important to place the order very clear to the staffs
in order to make the work flow fluently and make
the staffs understand all the function of the order effectively.

Question 6: What is the name of the stock control

method which is most commonly used in the TH&E
industry and involves recording data continuously on
both the amount of stock on hand and the cost price of
items in the storeroom.
The names of the stock control method are as followed
1. First in, first out (FIFO) 2. Last in, first out (LIFO) 3.
Weighted Average Cost

Question 7: Why is it necessary to identify and report

on slow moving stock item?
It is important to identify and report to the slow moving
stock items in order to prevent the over expenditure to the
business and always analysis stock levels and the stock
movement to prevent the life cycle of the products.

Question 8: List 4 methods you can use to identify slow

moving stock items.
There are 4 methods that can identify slow moving stock
items.
8.1. The Life cycle observation.
8.2. The analysis of stock levels and stock movement.
8.3. The analysis of the sales
8.4. The computerized searching inventories for slow-
moving items.
Question 9: What is the consequence of placing stock
order too early?
The consequence of placing stock orders too early.
The advantage is that it can prevent the loss possible of the
company by placing the stock order early, and it is the way to
reserve the product before other company.
The disadvantage is that is can be effect to the cash-flow if
there is a placing the stock order too early.

Question 10: Give 2 examples of factors which affect

the maintenance of stock levels.
The 2 example of the factors affect the maintenance of stock
level.
The first factor that affect to the maintenance the stock level
is that the demand of the product selling in the business.
The second factor is that the slow-moving stock items in the
business.

Question 11: There are 6 stages to the receiving

process. There are 4 listed below, name the other 2.
 Deliveries should be checked against the purchase
order to determine if the order is correct and
complete.
 The invoice or delivery note should be signed to
accept financial liability.
 Received goods should be moved into appropriate
storage areas.
 Receipt documentation should be completed.

The other 2 of the stages to receiving process is that the

process of giving the product to the customer and giving the
receipt to the customer.

Question 12: What are the recommended storage

conditions for the following stock items?
Frozen items: Make sure all the items of the refrigerator are
well-package and keep in the right temperature.
Meat: The meat should be inspected to prevent bacteria
before cooking and it is important to cook well.
Seafood: Keep in the right temperature and the right
packaging in order to keep the product well to use.
Fruit and Veg: The storage should be in the right humid and
dry storage.
Dairy products: The dairy products have to put in the
refrigerator that always cool temperature zone.
Chemical: The chemical have to keep in the dry place and
prevent the fire explosion.
Paper: The paper has to prevent for the light and avoid the
fire.

Question 13: Give 4 examples of things that can cause

stock losses.
13.1 Lack of the procedure to organize the stock losses.
13.2 The well template of the document control will help to
identified the stock loss, if the company doesn’t follow the
information in the template that it will cause the stock losses.
13.3 The staff understanding will help the company to save
the case of the stock loss. If the staff misunderstand the
process it will cause the stock loss.
13.4 The process of keeping item without proper requisition
and have to belong the followed.

Question 14: Give 4 examples of ways to verify stock

losses.
There are 4 examples of ways to verify stock losses.
14.1. In order to verify stock losses, it is important to recount
the items for checking the number of stock losses.
14.2. Investigate the cause of the possible in order to create
the potential security.
14.3. Create the record of the document sheet for calculating
the cost.
14.4. Record and reporting the remaining of the stock loss.

Question 15: Give 4 example of ways to prevent stock

losses.
There are 4 examples of ways to prevent stock losses.
15.1 Spot Check Identification.
15.2 Stock takes Identification
15.3 Variation between inventory and sales figures
15.4 Prevention Control

Question 16: List 3 items a contract with a supplier

may include:
List of 3 items a contract with a supplier include:
16.1 The purpose and the description of service or results.
16.2 The regulation of the contract and the confidential
information
16.3 The Insurance and the responsible of the contract and
the payment of the cost.

Question 17: What steps should you take if you

encounter a routine supply problem?
The step for encountering the routine supply problem.
17.1 Identify the problem
17.2 Analyze and define the problem
17.3 Generate the potential solution
17.4 Potential solution
17.5 Decision Making

Question 18: List 3 procedures you can use for issuing

stock?
The procedure of the issuing stock.
18.1 The procedure of issuing stock by familiarizing yourself.
18.2 Discuss the benefits of the stock.
18.3 Examine the possible of the stock loss.

Question 19: List procedures of a manual stocktake:

There are a 4 procedure of a manual stock take.
19.1 Clearly the business and identify the stock. 1
9.2 Make sure the stock room is tidy and clean.
19.3 Tools for the stock take
19.4 Discourage radios, mobile phones, iPods and idle chit
chat

Question 20: List 4 procedures of a computerized

stocktake:
The four procedure of the computerized stock take.
20.1 Before performing the stock, it is important to clean and
organize.
20.2 Reduce the impact on the business by scheduling the
stock in the business operations.
20.3 Stock and organize the tools ahead of time.
20.4 Keep Updating Inventory Data
20.5 Give the clear responsibilities and goal.

Question 21: Who usually performs the stocktake?

The performance of the stock take: The manager of the department and the staffs who is
responsible to the stock.

Question 22: List 5 pieces of information you might

find on a stocktake report.
List 5 pieces of information in the stock report.
22.1 Cash flow improvement
22.2 Profit Margins Accurate
22.3 Slow Moving Stock identified
22.4 Stock management improvement
22.5 The analysis of the possible stock losses.

Question 23: if the cost of goods sold for Canadian

Club Whiskey is $240,000 per year, and the average
stock held is $10,000, what should be the re-order
point for placing an order? (without considering the
delivery time for this calculation)

It is assumed that the re-order point for placing an order

occurred when the inventory level drops to the level it has to
begin to order to let the stock level bounce back.

Question 24: Give an example of a type of

computerized stock control system.
The example of a type with the computerized stock control
system. 24.1 Bar codes software and warehouse tracking
24.2 Automated Reordering and In-Stock Information
24.3 Point-of-sale for tracking goods warehouse.
24.4 Computerized inventory management systems.

Question 25: Explain the features and uses of the

following stock control systems:
Bin card The BIN Card is stand for Business Identification
system Number, it is use to record the status of the
good held in the stock with a large stock
warehouse to record the balance of stock. .

Imprest The imprest system is an accounting form of

system financial system use with the petty cash system
to replenish by cashing a cheque drawn on a
bank account.
Integrated The point of sale to make the payment in order
point-of- to exchange the goods and provision of a
sale service to receive the payment to receipt for
system the transaction.

Ledger A ledger system is a manual or computer record

system of the production supplies and raw materials in
a production facility.

Question 26: There are several aspects which must be

considered to maintain storage areas. What does this
need to include for the following aspects?
Cleanliness Make sure all the staffs understand the
procedure and process to clean the areas with
the right regulation. Moreover, it is important to
have knowledge to use the right chemical to
the right surface.

Lighting The lighting is important to the store. It will

help the staffs easy to find the product in the
store.

Temperatu It is essential to have a document to record

re control and inspect the temperature and humid.

Vermin To maintain the storage it is important to

maintain the pest control in the store areas.

SITXINV004 Control Stock

Assessment 2

ASSESSMENT INSTRUCTIONS
Complete the following assessment takes following the
instructions provided for each task.

Task 1 – Stocktake -Calculate and submit the excel spread

sheet file for Stocktake in soft copy and print and submit a hard
copy, write your name, date, unit code and unit title on the
print out.
Task 2

Discovering these issues helps you move your business in a

more profitable direction and eliminate anything that may have
been attributing to stock loss or incorrect counts. After all of the
hard work of completing a physical count, your stocktake is not
really complete unless you complete this part of the process.

The following list highlights some of the most common reasons

why business owners see discrepancies in their stocktake
numbers. Bear in mind that there are many more reasons,
which aren’t necessarily listed here, as causes can vary greatly
depending on industry and inventory record keeping methods.

 Stock loss due to damage

 Stock is in the incorrect location
 Human error during stocktake process
 Stock loss due to theft
 Stock is labelled with incorrect identification
 Stock mistaken for similar product
 Inbound stock not recorded accurately
 Faulty inventory management software or stocktake
equipment
 Incorrect unit of measurement was counted

Resolving your stocktake discrepancies: A checklist

 Re-count the stock in question. This should be your

first step if numbers aren’t matching up. It could be
something as simple as a mistake during the original
counting process
 Check if the stock exists in another location. If a
large number of items appear to be missing, double check
that they aren’t in another part of your storeroom, or
maybe a different storeroom altogether. There’s even the
chance that you’ve purchased the stock but it has not yet
arrived from your supplier
 Make sure the correct unit of measurement was
used. Ideally, all people participating in the count should
be trained on the procedure. However, there is still a
chance that someone may have counted in litres or
pounds, instead of boxes or individual units
 Verify that the SKU or product identification
number is correct. Though uncommon, it’s not unheard
of for products to be labelled with the incorrect SKU, thus
upsetting your inventory records. Check that the
description in your inventory management system actually
matches the product you’re counting. If it doesn’t, you’ve
found your problem
 Ensure the product has not been mistaken for a
similar product. This is a common error in stocktakes
when counting staff may not realise that a variation in size
 or colour is technically a different product with different
identification
 Scan your inventory records for errors. Sometimes a
discrepancy can come down to a simple mathematical
error
 Confirm that there is no missing paperwork. Sales
which have been unaccounted for can often throw off your
count. Go in search of any missing paperwork, which may
not have been entered into your system yet
 Investigate whether employees or customers have
been stealing stock. This is one of the least pleasant
steps to tackle, but it’s necessary if you can’t find any
other logical reason for loss of stock. Consider
implementing tighter security measures in store, such as
CCTV cameras or security tags on products.
 Speak to your warehouse/storeroom managers. A
slip up in the usual procedure for processing stock may
have occurred. Have a chat with your managers to see if
there are any kinks in the chain. If so, some staff may
need retraining or your entire procedure may need to be
revised.

Inventory problems are simply unavoidable in any business,

especially in the restaurant industry. You serve world-class food
and your customers are happy. However, when your business
does not yield a large profit. Food costs keep rising, waste and
spoilage pile up every month and food trend forecasts often
fail.

It is natural to feel more relaxed when your restaurant is fully-

stocked than when it is short of food. Therefore, inventory
managers are prone to order more than they really need. This
happens a lot in a restaurant where there is no definite
monthly/weekly order schedule. They make purchases
whenever their chefs decide that they need more of something.
This is also called blind-ordering. In addition, purchasers prefer
to buy in bulk for the discounts they get. However, most of the
time the extra food is left wasted and eventually goes bad
before you can use up your inventory.
Another situation that actually leads to excess inventory is
when a bar/restaurant let vendors step in and order for them.
Vendors always want to sell as many of their products as
possible. They will entice you to buy more and more regardless
of your demand level.

An efficient way to control your stock level is to calculate the

inventory turnover ratio. Inventory turnover ratio determines
how many times your restaurant’s inventory is used up and
replaced over a period.

Some food inventory is used for purposes other than generating

direct sales. For example, if employees are fed or are given a
significant discount, the food cost for these meals is usually
subtracted from the total found by the basic food cost formula.
The cost of employee meals should not be ignored, but it might
better be considered a labour cost and not a true food cost.

Promotional expenses are also subtracted from the basic cost of

food figure. These include “2 for 1 specials,” coupon discounts,
and other promotions. The deduction made, remember, is not
the menu price but the actual cost of the food to the operation.
Again, this expense cannot be ignored, but should be included
as a different type of operating expense.

In some restaurant and hotel operations, food is transferred to

the bar where it is served as as hors d’oeuvre to promote the
sale of alcoholic beverages. This is really an expense of the bar
and should not be considered a kitchen expense. The cost of
transferred food should be deducted from the basic food cost
figure. This cost is best considered a promotional expense
borne by the bar.

Other adjustments might have to be made to the gross cost of

food, depending on how the individual restaurant operates. For
example, in some cases, the kitchen might acquire wine or
liquor from the bar for cooking or flambéing, and that should be
considered a food cost.
SITXINV004 Control Stock

Assessment 3
Stock control Project

You are required to order, control and administer supply for at

least 6 different types of stock items, relevant to your area of
work or training situation, over a stock life cycle.

The stock life cycle has to be determined in conjunction with

your trainer:

Period for stock control and stock life cycle: from ______to______
Hospitality Sector: _______________________________
Department: ____________________________________

Stock to be monitored:
1. Monitor your Consumption
2. Place an Order When Required
3. Recipe Management is a Must
4. Calculate the Variance
5. An effective stock rotation system should start with management of the
delivery.
6. The display of products should be monitored on a daily basis.
7. The best way to manage these control measures is by compiling a written
procedure that staff should follow.
8. Review your menu regularly and how it affects your needs
for stock.
9. Plan the stock you need for each shift.
10. Use a supplier who understands your business needs and
supplies stock on time.
11. Make sure staff know the stock requirements for each
shift.
12. Follow the ‘first in, first out’ system of stock rotation, so
that older stock is used first. This helps to avoid waste.
13. Train your staff in stock control and make sure they know
in what order to use foods.

During the period determined above you are required to:

Regular monitoring of stock levels is essential for every

business regardless of your production cycle, whether it’s a day
or a month long.

Should your production cycle be just a day long, monitoring

stock levels becomes crucial mostly in terms of observing you
have what you need in stock tomorrow. You must make your
stock monitoring as automatic as possible to ensure that
nothing gets missed or neglected in terms of what to order.

The longer the production cycle, the more time you seemingly
may have to ensure your stock levels are meeting production
needs, however it becomes more crucial optimizing that your
order things with longer shipment time in the right time.
There’s no point in keeping storage space underneath goods
you need in a months time for instance, however it’s important
to have them there once the month has passed.

Another thing to note is that regardless of your production

cycle, goods or materials no longer in use with no future usage
planned either should be excluded from your stock, resold to
someone who uses them or scrapped. It’s about clearing the
storage space as well as the company’s balance sheet from
assets which in fact are no longer worth their value most
probably.

Before looking at the tips, you should first understand key goals
of inventory management system. When using any inventory
control system you should be well aware of the goals it should
accomplish. These goals helps you identify the effectiveness of
your current system and also if improvement is possible and
where and how. These goals are
  System should be able to tell real-time location of your
inventory.
 System should be able to tell and update changes in your
inventory.
 It should involve a plan for how much inventory to order
and keep, and when to re-order as well.
Once you have an understanding of the goals, your current
inventory control system and are looking forward to expanding
your business, then here are some tips to reduce shrinkage
greatly and thus help you in the stock control process.
Check all stocks inwards

Your first focus should be checking on whether the delivered

stock is exactly what you ordered from your supplier.
Sometimes suppliers get stock orders incorrectly packed and
while assuming you have correct numbers you add the
inventory to your shelves. In these cases when you receive
orders you are liable to get short stocked and thus lose your
sales and your credibility as well. In another case you might
actually have more stock than needed and you won’t even
know when to reduce prices or not order anymore of it.

Store your stocks wisely

It is easier to place your stock wherever it fits. But the easy way
isn’t always better, as this can make it harder to track the
product. And if you have similar products with similar
packaging (could differ in quantity or have unnoticeable
difference) then while in hurry you or your staff may make a
mistake and likely cause errors.

Create clear labels for each product

Each product in your stock must have a clear label on it with
product number, quantity, basic description including vendor
name and other important details. Labelling makes identifying
the product much easier. It makes tracking easier as you are
always able to know about the box’s contents with its exact
quantity. This can also be done using barcodes instead of
labels.

Keep track of expiry dates

If you offer expired products, then you will obviously be liable
for hefty fines if the product gets delivered to the customers. So
it is important for you to keep track on the best before dates of
each product in line so that you can clear the stock before it
gets outdated by either lowering the price or any other way. It
is also important to check the best before dates of outgoing
orders before packing.

Don’t compound problems

If you have made a wrong delivery, then when delivering
another product instead make sure to amend the stock levels
for both the products. At times, it may seem obvious, but while
in all the hassle of running the business, this can easily be
overlooked.

Set threshold stock levels

Every business has different peak times when the sales
increase or decrease with large differences and also each
supplier also have their own different lead times. So if you want
to keep your business going and want to escape out of stock
situations then you should be able to establish how long you
can restock normally and forecast the amount of time the
minimum stock level will get exhausted. In these cases, you
need to keep in account the market seasons and then the
fluctuating customer demands. You should ideally have a buffer
amount to cover the amount of time that is required for
restocking. You are also required to maintain stock of less-
demanded products for lowering the transportation costs.

Manage returns effectively

One of the biggest issue surfaces while handling the returns
mainly in fashion and electronics markets. If you get any
delivered stock returned when they are discovered defective
then you have to make sure that your stock levels don’t get
adjusted upwards and make sure to account for it with your
suppliers.
Always keep an eye on stocks
You should always keep track of your stock in real-time. If you
have made or are encountered with an error, then it’s better to
point it before taking the order. If not, then you will have to
spend time contacting them if an error is spotted later or
restocking if you haven’t and in the worst case you fail to
deliver and lose your sale with the credibility of your brand.
Keep priorities in check
Keeping track of inventories altogether is time taking and
exhausting task. So you should keep your priority straight.
Usually, 80% of your demands are generated by only 20% of
your products. You should set management operations i.e.
forecasting, stock-level check, and reordering of these products
as priority. Then make next best selling products next on your
list. You can focus on stock tracking accordingly for rest of your
stock too.

Using daily and/or weekly sales reports with your team may be
the single most powerful action you can take to increase your
team’s performance. Don’t believe us? We’ll convince you with
an example from another sector – fitness. Let’s say a friend of
yours has a goal of losing 10 pounds of fat, or gaining 5 pounds
of muscle, over the next 2 months. Your friend excitedly tells
you their plan, and all of the actions they plan to take to
achieve their goal. “I’m going to cut out carbs, start walking
everyday, and drink tons of water” he says with a smile on his
face. “I think it’s great that you’re committing to fitness,” you
reply. “How are you going to keep track of your goals?”

At this point, if your friend said something like, “Well, I’m not
going to until I’m about 6 weeks in. But I’m going to try really
hard so I know I’ll hit my goal,” you would probably question
your friend’s judgement. You would think – yes, it’s all and well
to try hard, but if you can’t keep track of your progress, how
will you know if:
 What you’re doing is working at all?
 Whether you’re doing the right things, but you need to do
more of them?
 Whether you need to change course radically to hit your
goal?

To use another example, one secret that good cooks use is to
taste their food constantly as they are preparing it. They know
that if you only start tasting the dish near the very end of the
cooking process, the food is too far along to change much. So
they taste test frequently throughout the whole process.