Base Stock Policy

Posted in Operations and Supply Chain Terms, Total Reads: 6846

Definition: Base Stock Policy

Base stock refers to the minimum inventory necessary for the firm to maintain effective and continuous operations.

On the same lines, base-stock policy or the base-stock method is a method pertaining to inventory valuation.

The policy states that an organization values the base stock at the acquisition cost and all the additional stock over the base value is valued on either LIFO or FIFO basis.

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