SITXINV004 Control Stock Knowledge Test

SITXINV004 - Control stock

Knowledge Test

INSTRUCTIONS

This is an open book assessment to be conducted in the classroom under Trainer’s supervision.

There are 20 knowledge test questions, each with four responses of which there is only one correct response.

You are to nominate the correct response to each question by circling the appropriate letter ( a, b, c, or d) on this document

You must answer all questions correctly to achieve competency for this assessment.

On completion, submit the knowledge test to your assessor.

Ask your assessor, if you do not understand a question. Your assessor cannot tell you the answer he/she may be able to re-word the question for you.

Re-assessment: If you do not achieve the required standard, you will be given the opportunity to be re-assessed by our Assessor. Arrangements will be made on an individual basis. If you are deemed to be NS (Not Satisfactory), your assessor will either ask specific questions orally, and record them with you using the supplementary evidence sheet or you will be asked to resubmit your responses in full.

Feedback: Your assessor will provide feedback to students after the completion of the assessment. The assessor will explain the appeals process when required.

Why are stock control systems used in a business?

• It allows a business to accurately record and monitor stock movement, and manage stock levels.
• They allow a business to manage costs for all aspects of the business’s production processes.
• It ensures correct stock rotation and JIT ordering processes are used effectively so stock movement is reliable and efficient.
• They produce accurate, reliable reports on stock purchases, wastage and sales, and aid management when developing budgets.

Why should you monitor/maintain stock levels and record current, accurate details?

• To ensure stock is not damaged or lost and to prevent theft.
• To ensure agreed deadlines are met and prevent miscommunication with suppliers.
• To meet customer and organisational requirements, and to prevent over- or under-supply.
• To distribute stock to all areas of the business based on projected requirements and prevent inaccurate stocktakes.

As part of your monitoring process, you have become concerned about the security of stock held in a particular storage area. The storage room is secured with a locked door. The key that accesses the area where the storage room is located also opens the stock room door. What do you do?

• Change security procedures immediately to tighten security and restrict access to the storage room.
• Inform management of your concerns, and evaluate and adjust security procedures if required.
• Conduct a staff meeting to inform staff of your concerns and warn them of the consequences if discrepancies are found.
• Conduct daily stocktakes to monitor stock levels and identify any discrepancies. Action can be taken once security issues are confirmed and documented.

What information about stock ordering responsibilities should you communicate with your colleagues?

• Inform them of any issues or conflicts you’re having with suppliers. Discuss how these should be handled when deliveries are made.
• Describe how you calculate supplier costs and complex order costs, and how you produce complex numerical reports for management.
• Remind staff of individual job roles and responsibilities and their impact on stock ordering and control processes.
• Discuss individual stocktaking and stock ordering responsibilities, and reasons for stock losses and how to prevent them.

What records and reports do you maintain to keep track of stock levels?

• Bin cards, stock usage reports, issuing records, inventories, stocktakes.
• FIFO, JIT, PAR and POS.
• Credit notes, invoices, orders, delivery notes, internal requisitions.
• Standard purchase specifications and purchase/supply agreements.

How do you identify fast and slow-moving stock items?

• Monitoring the results of physical stocktakes.
• Setting par stock levels.
• Calculating stock turn.
• Preparing minimum order levels.

Why must you monitor and adjust reorder cycles based on stock usage and performance?

• You shouldn’t need to adjust reorder cycles if you’ve calculated stock levels correctly in the first place.
• To ensure that an ‘ideal quantity’ of stock is on hand between orders.
• To make sure stocktakes are carried out correctly.
• To maintain good relationships with suppliers, manufacturers and delivery companies.

How do purchase specifications and supplier agreements affect how you order stock?

• Specifications set minimum standards for the items you order, and agreements control who you order stock from.
• Purchase specifications determine who you order stock from and supplier agreements set pricing structures and delivery schedules.
• Supplier agreements set specifications for the quality of items and lead times for delivery to the business.
• They establish procedures for the ordering, delivery and documenting of stock from each supplier the business deals with regularly.

What documents can be used when checking and recording incoming stock?

• Bin cards, stock usage reports, issuing records, inventories, stocktakes.
• Orders, delivery documentation, internal requisitions and standard purchase specifications, as well as purchase and supply agreements.
• Temperature control charts, stock performance analysis and delivery documentation.
• Delivery documentation as well as stock level, stock loss and stock performance reports.

How can you best prevent stock losses from happening?

• Regularly check the storage of stock, rotate it and ensure it is secured.
• Liaise closely with delivery drivers and make sure delivery documentation is checked correctly.
• Ensure that all staff understands their ordering and stocktaking responsibilities.
• Train all staff in relevant stock control procedures and monitor their application.

What action should you take if you identify a stock loss?

• Record it. Report it. Contact your supplier about it. Tell them not to let it happen again.
• Record it. Report it. Investigate reasons for it. Find solutions for it. Implement procedures to prevent it from happening again.
• Report it formally to management in a report. Establish the person responsible for it. Take disciplinary action according to organisational procedures.
• Determine the value of the stock loss. Record and report the value of the loss to management. Change security and monitoring procedures immediately.

What type of loss could have been avoided?

• A customer has lost their key entry card to your hotel after a swim at the beach.
• Your restaurant’s frozen seafood must be disposed of because a storm disrupted electricity supply for three days.
• A whole shipment of glasses for your bar was broken because the delivery truck had an accident on the highway.
• Cameras from your gift shop were stolen because a staff member forgot to set the alarm at closing time.

You notice that stock is often written off as a loss because it has passed its use-by date. Which solution would you recommend and how would you best implement it?

• Improve physical inventory reports through implementing more stringent stocktaking procedures.
• Improve storage of perishables by using PAR levels to manage ordering processes.
• Improve stock rotation by training staff to use FIFO procedures correctly.
• Improve hygiene and housekeeping standards according to WHS and organisational procedures.

What’s the primary reason for following up on orders and monitoring the delivery of stock?

• To identify irresponsible suppliers and delivery companies so you can discontinue relationships with them.
• To ensure that deadlines are met and supply of stock is continuous so you can deliver quality customer service.
• To make sure that dishonest delivery drivers don’t steal the stock.
• To ensure quality supplies that meet customer and legislative standards are delivered in a timely manner.

Who should you liaise with to ensure continuity of supply?

• You should liaise with suppliers and all other relevant people in the supply chain as required.
• You should liaise primarily with inward goods staff and administrative staff such as the financial controller.
• You should only liaise with representatives from freight or delivery companies.
• If you’ve processed stock orders correctly, you shouldn’t need to liaise with anyone to ensure continuity of supply.

What do you do if you can’t resolve a supply problem yourself?

• Delegate it to a lower-level staff member.
• Call a meeting and conduct a team brainstorm.
• Refer it to the appropriate senior level person for action.
• Leave it for a few days until a solution comes to you.

What determines when and where stock is distributed within an organisation?

• Location of area requesting stock, internal transportation methods and staffing levels.
• Organisational stock control procedures and supplier agreements.
• Internal ordering processes and when external deliveries are received.
• Internal requisitions, stock requirements and production or service periods.

How often should you organise and conduct stocktakes?

• You should do full stocktakes once a year in addition to spot-checks throughout the year.
• You should conduct cyclical stocktakes to progressively count stock throughout the year, as well as do a full end-of-year stocktake.
• At appropriate intervals for stocktakes according to your type of business, type of stock and financial reporting requirements.
• You should conduct a daily count of perishables, weekly stocktakes on spirits and monthly stocktakes on glassware, in addition to your yearly stocktake.

How do you administer an efficient stocktake?

• You should allocate stocktaking responsibilities to junior staff and allow more experienced staff members to continue the day-to-day running of the establishment.
• You should allow upper management to administer stocktakes to ensure accuracy and thoroughness.
• You should conduct most of the stocktake yourself and get a trusted staff member to doublecheck your figures for accuracy.
• You should allocate stocktaking responsibilities to staff and supervise the operation of the stocktake.

What is the ultimate goal of a stocktake?

• To get a general idea of how much stock your organisation has in storage.
• To reveal losses due to negligence.
• To produce accurate stocktake reports within designated timelines.
• To encourage staff to be more detailed in recording stock levels.