Balanced Stock

Posted in Operations and Supply Chain Terms, Total Reads: 1525

Definition: Balanced Stock

Balanced stock is the condition wherein the supply is able to meet the demand or the requirement of the specific product. Balanced stock is the scenario where the products are readily available for the customers as and when they need it. For this, supplies are accumulated in quantities that are necessary to meet the demand for a specific period.

For maintaining balanced stock, there are various steps that could be adopted by the firm.

First of all, the firm needs to record all material movements. If movement of material is not recorded, it could lead to inaccuracies in the inventory stock. All inventory related transactions could be recorded, such as normal stock receipts, unexpected stock receipts, requisitions, sales, transfers to other warehouses, assembly orders etc.

Next, the firm must focus on assigning the tasks to the proper persons. This is an important requirement, since each person would have a different knowledge base. For example, the personnel at the receiving end must be able to properly identify products while receiving, and stocking people should know where the material is store. Bar coding of the products can be useful in verifying the items that are being handled, and also for instant updates of computer records. It will also reduce the error count.

Another thing that should be done is counting a few products, on every business day, throughout the year. This is also called cycle counting


Hence, this concludes the definition of Balanced Stock along with its overview.

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