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Order Stock And Process Payment

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Order and Reorder Stock And Process Payment

A store that is constantly out of stock will cause the farming enterprise a loss in profit. This is because the inputs will not be available when they are required. The opposite is also true. If a store has too much stock and cannot use it quickly enough, the old stock builds up and will eventually become obsolete and must be disposed of.

Stores need to have sufficient stock to maintain requirements, but not so much that there is a stock build up. The best way of ensuring an appropriate level of stock is to use an efficient stock ordering and maintenance system. By planning stock orders, the problems of too much or too little stock can be minimised. Factors such as what, how much and when to order stock must be considered so that it arrives in time to fulfil the need.

The first step in the planning process is to identify the store’s minimum stock levels. The minimum stock level of any item is the lowest quantity of that stock that should be kept at all times. When the number of items in a particular line reaches a set minimum level then more of that stock is ordered. This process means that the shelves should never empty and there should never be any excess stock or that the store should not run out of stock. In the case of a farm store the minimum levels of a particular input may vary with the growing season.

For example, if a fertiliser is applied to a crop three times during the season and the volumes are the same, the critical time and the minimum volume required would be that for a single application. The critical time during the season for the stock to be kept would be 2 – 3 weeks prior to the planned application date, as conditions may change requiring an earlier application.

Ordering Stock

A factor to be considered in the process of ordering stock is when to order stock so that it arrives in time. The time it takes from when an order is placed with a supplier to when it arrives in the store is called the lead-time. The lead-time can be anything from overnight to several months, depending on the type of stock, the supplier and minimum order requirements. Knowing the lead-time enables the timing of orders to be more efficient. Once the need for ordering more stock has been established, there are several ways of completing the order.

Manual ordering involves counting the stock to establish minimum stock levels, recording the stock levels in a stock book or on stock cards, calculating the quantity to be ordered and then placing the order with the supplier. Hand held electronic equipment scans the barcodes and the stock levels are entered manually. This information can be downloaded or entered into a computer from which orders are generated. The number of people ordering stock should be kept to a minimum. This reduces the risk of over/under ordering, reduces mistakes and eases the following up of undelivered orders more efficient. Any undelivered stock should be entered into the stock recording system as soon as possible, and be followed up immediately by the person who ordered the stock.

Stock may not be delivered for a number of reasons, for example it may be:

  • No longer available
  • Out of season
  • Placed on back order x Undeliverable because of transport problems x Subject to quotas
  • Stolen

Substituting Stock Items

In many cases the stocks order can be substituted with other comparable inputs. It is essential that the quality criteria be adhered to when substituting. Always determine the price of the item to be substituted as the price may influence the farm budget for the item.