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Page Title: Stock Control
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Consult  NAVSUP  P-487  for  the  details  you should  include  in  these  requests.  You  should remember  that  the  restrictions  that  have  been imposed  on  you  are  not  intended  to  stifle  your initiative.  If  you  submit  a  request  properly,  you will normally receive approval from NAVRESSO. Prohibited Items You  are  strictly  prohibited  from  procuring certain  merchandise  for  your  ship’s  store.  For example,  any  items  that  bear  the  impression  of U.S.  currency  are  prohibited  merchandise.  You cannot procure these items for your ship’s store. You  are  also  prohibited  from  procuring  special occupational   and   environmental   clothing   and textile  (cog  symbol  9D)  items  unless  you  have received  written  authorization  from  the  Com- mander,  Naval  Supply  Systems  Command.  In addition,  you  are  especially  prohibited  from purchasing or selling through your ship’s store any medical items such as drugs, remedies, vitamins, or   other   similar   products   for   the   external   or internal  treatment  of  diseases  or  conditions. STOCK  CONTROL The ability of your ship’s store to support the needs of your ship will largely depend upon how well  you,  as  a  senior  Ship’s  Serviceman,  handle the  responsibilities  of  stock  control.  To  develop and maintain effective stock control, you should review your inventory control records and make your  scheduled  monthly  review  of  all  stock  and stock  records.  These  reviews  provide  fundamental knowledge with which all responsible ship’s store personnel must be familiar in order to develop and maintain  effective  stock  control.  Your  efforts  in stock  control  are  important  because  your  ship’s store   does   not   have   an   unlimited   amount   of money  to  invest  in  stock.  Carrying  excess  stock will cause you to waste valuable storeroom space that might be used for other materials. Frequently, this type of waste results in a decrease in sales. On  the  other  hand,  if  an  adequate  supply  of material is not in stock, a decrease in sales will also occur. There is an optimum stock level you should  achieve  that  will  minimize  the  loss  of  sales that  would  result  from  these  problems.  Main- tenance of an optimum stock level is the primary purpose for your scheduled monthly review of the inventory  control  records  and  the  stock  record cards. To   appreciate   the   importance   of   effective stock control, you must first understand how the flow of money and materials in the Navy resale system  affects  your  ship’s  store  afloat.  The  follow- ing diagram represents the system. The  cycle  begins  with  WORKING  CAPITAL (Navy  Stock  Fund  [NSF]  money)  which  is  used to  procure  your  ship’s  store  stock.  PROCURE- MENT   of   ship’s   store   stock   determines   the amount  of  INVENTORY.  SALES  of  ship’s  store stock then replenish your WORKING CAPITAL. In  addition  to  replenishing  your  WORKING CAPITAL  for  the  cost  value  of  the  items  sold, SALES also generate your PROFITS. Your PRO- FITS are determined by the markup over cost that was  applied  to  the  various  items  sold  in  the  ship’s store. As a ship’s store manager, you will use as your optimum   stock   level   an   anticipated   90   days’ supply  of  stock.  If  you  exceed  this  amount,  you are  tying  up  too  much  Navy  Stock  Fund  money in your ship’s store inventories, for only so much NSF money is allocated on a Navy-wide basis for inventories.  On  the  other  hand,  your  failure  to maintain  sufficient  stocks  on  board  will  ultimately result in decreased sales. A sales-stock ratio is computed to determine your   efficiency   in   maintaining   your   optimum stock level over a given period of time. As stated in  the  NAVSUP  P-487,  you  should  maintain  a 1.33  to  1  ratio  of  sales  at  cost  price  to  your beginning  inventory  (less  standard  clothing  items) per  each  4-month  accounting  period.  In  other words,  a  W-day  supply  of  stock  should  “turn over”   1   1/3   times   in   a   120-day   (or   4-month) accounting  period.  You  can  obtain  your  stock figure by dividing your cumulative expenditures for  the  number  of  months  covered  by  the beginning  inventory.  You  will  read  more  about the  actual  calculation  of  your  computation  of your stock turn figure later in chapter 7. For now, however, the following example of various sales 4-4

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