Learning Materials For Accounting, Management , Finance And Economics.

Monday, May 17, 2010

Concept And Meaning Of Stock Level

Stock level refers to the different levels of stock which are required for an efficient and effective control of materials and to avoid over and under-stocking of materials. The purpose of materials control is to maintain the sock of raw materials as low as possible and at the same time they may be available as and when required. To avoid over and under-stocking, the storekeeper must fix the inventory level, which is also known as a demand and supply method of stock control. In a scientific system of inventory control the following levels of materials are fixed.

1. Re-order Level
2. Minimum Level Or Safety Level
3. Average stock Level
4. Danger Level