CHAPTER 6 INVENTORY

Inventory in ship's store afloat is the process of bringing stock records into agreement with stock on hand, determining current money value balances, and reestablishing accountability. As a Ship's Serviceman second class, you can expect to become more involved in the inventory process. In this chapter we discuss the various steps of this process, including preparing for inventory, accomplishing the actual inventory, accounting for the inventory, and reconciling the results of the inventory.

PHYSICAL INVENTORY

Physical inventory is the process of identifying, counting, and evaluating all stock on hand at a specific time. The purposes of physical inventory are the following:

. To determine the dollar value of the stock on hand so that required financial reports can be prepared 

l To check on the accuracy of stock records and stock on hand 

. To determine the dollar value of stock shortage due to spoilage, damage, waste, pilferage, or other losses not shown on the stock records

. To identify stock shortages and overages and to determine financial liability 

l To use as a management tool for effective stock control

In this section, we discuss the procedures for inventory in combined or separate responsibility. Inventory includes all ship's store and standard Navy clothing stock. Cost of operation items on hand in activities other than the bulk storeroom are not inventoried because they have already been expended from the records. This category also includes consumable supplies in the laundry, barbershop, and so forth.

INVENTORY PERIODS

Inventory is taken at the times listed in the following paragraphs.

At the end of each accounting period or sometime during the last week of business, an itemized inventory of all ship's store and standard Navy clothing stock is taken.

When the ship's store officer is relieved, an itemized inventory of all ship's store and standard Navy clothing stock is taken.

When the bulk storeroom custodian is relieved in separated responsibility and when the sales outlet operator is relieved in combined responsibility, an itemized inventory of all ship's store and standard Navy clothing stock in the bulk storeroom is taken.

When the ship's store receives a change to the Navy Clothing Price List for Men and Women, NAVRESSO Pub 90, for those clothing items affected by the standard price change, an itemized inventory of standard Navy clothing stock is taken.

When the sales outlet operator is relieved on ships operating under separate responsibility, a price line inventory or itemized inventory of all stock in a sales outlet is taken.

NOTE: Price line inventories are discussed later in this chapter.

In a self-service retail store or a sales outlet operated by more than one person, a price line inventory or itemized inventory of all ship's store and standard Navy clothing stock is taken monthly.

When there is evidence of unauthorized entry into the sales outlet, a price line inventory or itemized inventory is taken.

When directed by the Navy Resale and Services Support Office (NAVRESSO) and with the type commander's approval, an itemized inventory is taken monthly for ships with excessive inventory differences.

An inventory is taken at any time when directed by the type commander (TYCOM), commanding officer (CO), supply officer, or ship's store officer.

PREPARING FOR INVENTORY

The ship's store officer must make sure the inventory personnel are assigned and are familiar with local inventory procedures, layout sketches are prepared for spaces being inventoried, stock is arranged, and entries on the ship's store records are up to date.

Assigning Personnel

The ship's store officer is responsible for a complete and accurate inventory. A two-count system is used with two inventory teams counting all material. Normally there are two persons to an inventory team, a counter and a recorder. But if sufficient personnel are not available, inventory teams may be made up of one person. The office recordskeeper will never serve on an inventory team. Teams are made up as follows:

. First count team-Either the ship's store officer or other commissioned officer and one enlisted person

. Second count team-An enlisted person in a supply rating E-6 and above and one other enlisted person

Monthly price line or itemized inventories of self-service stores or sales outlets operated by more than one person can be conducted by a qualified senior enlisted person in the supply rating E-6 or above with the TYCOM's approval.

On large ships with several sales outlets and bulk storerooms, inventory may be taken by multiple inventory teams with the TYCOM's approval. The number of inventory teams is determined by the ship's store officer. The two-count system is used with multiple inventory teams, and each sales outlet or bulk storeroom is counted by two teams. The ship's store officer supervises the teams, which are made up of one enlisted person in the supply rating E-6 or above and one other enlisted person.

Local Instructions

Since each ship's store differs in size, volume, layout, and so forth, it is necessary to prepare specific instructions covering inventory procedures for each ship based on the instructions contained in the Ship's Store Afloat, NAVSUP P-487. Once prepared, these instructions are distributed to all personnel before the inventory. The instructions cover such subjects as assignment of personnel, cutoff times, stock arrangements, counting, recording, and extending. The ship's store officer is required to schedule training periods when needed, to make sure inventory procedures are understood by all personnel.

Layout Sketch

The purpose of a layout sketch is to make sure an accurate but speedy inventory is done. Layout sketches of the sales outlets and bulk storerooms are prepared by the ship's store officer in advance of the inventory. The layout sketches include each bin, shelf, and showcase, identified by a number as shown in figure 6-1. If the space is large, it may be broken down into sections and a layout sketch prepared for each section. A number identical to the one entered on the layout sketch is attached to the corresponding fixture located in the space.

Arranging Stock

To make counting faster and easier, all merchandise in the sales outlet or bulk storeroom is sorted and consolidated by identical merchandise and price line. Empty cartons, except those used for packaging of merchandise on display, must be removed from the sales outlet or bulk storeroom so they won't be included in the inventory. The contents of cases, boxes, and containers from which items have been removed must be counted. The markings on the outside of a previously opened case are not used as your count under any circumstances.

Entries on Records

Before the inventory, the office recordskeeper must post all receipt, expenditure, and intrastore transfer documents to the ship's store records. This includes the Stock Record, NAVSUP Form 464; the Journal of Receipts' NAVSUP Form 977; the Journal of Expenditures, NAVSUP Form 978; and the Ship's Store Afloat Financial Control Record, NAVSUP Form 235, when it applies.

Figure 6-1.-Layout sketch for the retail store and bulk storeroom.

Any stock that is slow-moving, damaged, or obsolete must be properly marked down to the new cost price and the price changed before the inventory cutoff date.

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