Chapter 2 – Fiscal Management

22030.10.4 Criteria for Selecting Items for Continuing Storage

• Demand – at least five recurring demands for each 365 days demand year. Demands must occur on a regular basis and reflect a standard usage pattern over a 365-day period.

• Volume – stable and large enough to permit significant savings from acquisition in quantity.

• Dollar – minimum issues of $50 per demand year as long as the demand criteria is met.

• QAQuality Assurance – items that require a high degree of QAQuality Assurance shall be selected for continuing storage.

• Emergency – items of an emergency nature, which may be required within hours after the need is recognized, shall be held in continuing storage.

• Specifications – only items that have established accepted standards or detailed specifications shall be considered for inventory.

• Usage – infrequently used items or those with patterns of erratic use do not make good inventory items, as large inventories are required to meet high use periods (e.g., usage patterns show more than five demands per year but all the demands occur in a restricted time period).

• Lead-time – the non-critical item that can normally be purchased from a local source within 30 days shall not be stocked.

• Items shall not be stocked merely for convenience. For non-critical items, institutions shall rely primarily on the purchase-as-needed technique. Continuing storage inventories shall be limited to only those items that are clearly justified as contingency stock for emergency needs or items that are not readily available from relatively nearby sources.