CHAPTER ONE
1.1 INTRODUCTION
Stock taking is the physical verification of the quantities and condition of items held in an inventory, as a basis for accurate inventory audit and valuation. Stock taking is necessary to ensure that the stock records are accurate.
Regular stock taking is an essential element of a loss minimization strategy. The process helps you to compare actual stock levels with the stock levels based on your ordering records.
A company is expected to maintain adequate stock of material for a continuous supply of raw material to the factor for an interrupted production It is not possible for a company to procure raw material whenever it is needed, and more so the finished goods manufactured by a company cannot be sold of the sometime, a time log exists between demand for material and supply.
The procurement of material may be delegated because of such factors as strike, transport , disruption, short supply etc therefore there is a need for a firm to maintain sufficient stock of raw material at a given time to streamline production to maintain the concept and conservation of account. The continuity existence to adequate raw materials for economics purpose.
The control of inventories and management of store house in common with the other major branches of commercial and individual work become specialist activities.
The stores should be considered as a temporary location for materials needed for operational purpose and should be planned, organized and operate in such a way that the period of residence of each stock items is as short as possible consistent with economic operation.
In general, if demand is steady or highly predictable then we should store for very short period if at all when demand is highly unpredictable then storage for longer period may be necessitated.
There is no standard system of store keeping which and universally recommended or applied but in the course of me certain principle and practices of more or less general application haven been involved large sums of money are involved and it is essential or organic to stock management or sores function so that the investment is kept to the minimum from the stores point of view the most important thing is to keep the quantities of incoming goods in their appropriate and respective position and necessary records and transaction follows immediately shortage must be avoided or else production line will have to stop.
At the same time for much must not be delivered or it will clog up the ware house and perhaps also the production area, apart from the fact that excess deliveries will be tie up more capital.
It is well known that most materials will determined in store in the course of time and the fact that a building is provided for storage in itself an acknowledgement that some degree of production is required.