Following internal reorganisation in a large brewing company, a comprehensive review of stock-control procedures is currently being undertaken. You have been asked to investigate stock control in the context of one of the firm’s products:

low-alcohol lager. The company operates a sophisticated forecasting and production planning system to forecast demand for this product from its own pubs and from other customers (off-licences, supermarkets, hotels) on a four-weekly cycle.

That is, the company tries to forecast four weeks ahead and updates these forecasts each week. Over this four-week period, production of lager takes place and the output is stored until delivery to customers takes place at the end of the four-week cycle. Customers are able to place and receive orders outside this cycle but only at additional cost. Additionally, the company is thinking of installing a new computer network which will link all the company’s pubs so that the stock-control manager will be able to monitor stock levels and sales.

Draft a management report outlining the importance of an efficient and effective stock-control policy for the company. You should include in your report a suggested stock-control policy that you feel is appropriate for the company and this should include reference to:

● the links between the forecasting role and stock control;

● the choice between continuous versus periodic review system;

● the potential benefits of the new computer system;

● the data requirements of your suggested stock-control policy;

● the problems and difficulties that you think might arise if your policy is implemented.