• Main objective = have stock available within an acceptable time and at an acceptable cost.

12.1 Purchasing

• Keep enough parts to meet daily needs without tying up unnecessary cash.
• Senior management should agree minimum safety stock levels.
• Re-order when stock approaches the agreed level.
• Bulk buying may obtain discounts where distribution to other depots remains practical and economical.
• Consider lead time: the period between ordering and receiving goods ready for use.
• Regularly identify slow-moving items that tie up cash.
• Standardising parts can reduce the range of stock required.

12.2 Reconciling Stock

• Reconcile book stock figures with actual physical stock.
• Example: opening fuel/oil stock 4,000 litres + receipts 30,000 − issues 22,000 = closing stock 12,000 litres.
• Physical stock should support the recorded balance; the material gives tank dipping as an example for fuel.
• Investigate discrepancies.

12.3 Parts and Tyres

• Carry out a physical stock count, or agreed equivalent control, at least four times a year.
• Investigate significant discrepancies, especially involving expensive items.
• Pay particular attention to attractive/saleable items such as batteries, lamps, tyres and tools.
• After investigation, stock deficits should be written off in the financial accounts where appropriate.

12.4 Obsolescence and Security

• Identify stock that is slow-moving or becoming obsolete.
• Convert obsolete stock to cash quickly by selling it to an operator who can use it or as scrap.
• Maintain adequate security over stores and fuel stocks.
• Restrict entry to stores areas.
• Keep valuable stock/fuel secured and limit key access where possible.