Dead Stock Concept in MC50

MC50 looks at the stock level for a material over a period of time and identifies the lowest level that the material reached. That lowest level is the dead stock quantity as, in theory, that stock was not required. It works on the principle that in an ideal world scenario you would maintain zero stock sitting in the warehouse because you were able to plan such that every day you receive / produce the exact amount that you require to meet all customer requirements with no surplus.

An example would be that if you met all demand over a 3 month period and the stock level in that time never dropped below 100 then that would be the dead stock level as throughout the period you supposedly could have had 100 less stock and still met all requirements.

Dead stock is the part of your warehouse stock that has not been used for a certain period of time. In contrast to the safety stock (intended dead stock), the dead stock value allows you to identify materials with inefficient amounts of stock.

Generally a dead stock occurs if there is too much stock. This may be due to restrictions concerning minimum purchase quantities. Early purchasing and provisioning may lead to dead stock as well, which indicates maladjusted control parameters.