Inventory

Question 1. Aggregate inventory data suggest that while overall average inventory levels are declining, the relative percentage being held by manufacturers is increasing. Explain why you think this observation is either true or false. Describe how such a shift could benefit the operations of the entire channel and how manufacturers could take advantage of the shift. This observation can be true because the use of a warehouse can be reduced in a significant way making the overall process…

Industries hold spare parts inventory for equipment repairs and support purpose only. It is different from other types of inventory that is used in production for conversion raw material to finished goods. This distinction keeps spare parts inventory apart from other types of inventory. It suggests a separate inventory system for spare parts inventory to control critical and valuable items stringently. Spare parts inventory is important for carrying out timely maintenance and bringing broken…

Inventory management is vital to the survival and success of the business. In order to keep track of inventory, retailers use a point-of-sale (POS) system that records each transaction as the items are read by a bar code scanner (Vonderembse & White, 2013). This information is used to analyze customer sales data, buying history and pricing information. Alliance Supermarkets has been using a point of sale (POS) system for some time to track its inventory. This paper will formulate new and…

In management of inventories, the firm’s objective should be in consonance with the wealth maximization principle. To achieve this, the firm should determine the optimum level of investment in inventory. To deal with the problems of inventory management effectively, it becomes necessary to be conversant with the different techniques of inventory control. Although the concepts involved in inventory management are production oriented and not strictly financial, it is important that financial…

ratio, the inventory turnover ratio, and the net profit margin ratio. To find the quick ratio, we add cash, cash equivalents, short term investments and current receivables and divide them by the current liabilities. I found that the quick ratio is 1.86, we use this to find the companies liquidly position, which the company has $1.86 of liquid asset available to cover for every $1 of the company’s current liabilities. The inventory turnover rate allows us to determine how often the inventory…

Inventory Cost Are the one of the major logistics costs for large number of manufacture and retail companies, and they can represent a significant element of the total cost of logistics. There major cost trade –offs that can made with all the other key logistics components. It is important to be able to understand what the key cost relationships are within a company. There are four principal elements of inventory holding costs are: 1. Capital Cost :The cost of the physical stock it also a…

When considering inventory management and social media, we need to be certain that all necessary information has been compiled and is available. The information that a company needs is basic. First, the company needs to make sure that everyone who must be involved is on board as far as communication. There is certainly sufficient information with just social media systems to work on management. For example, using Dropbox the inventory manager can send reports to management for planning…

process of the Just in Time (JIT) inventory system in companies, as well as provide key examples of JIT. It is considered to be one of the best inventory management systems that there are. Due to the reliance that many companies have on JIT, it is important to realize the utilizations of the system and why it is commonly used. As well as, recognize potential weaknesses, and possible risk mitigation plans that companies can practice to avoid future problems with inventory management. JIT Key…

With ABC in 2014 taking on average 64 days to sell its stock, it achieved a 5.7 times inventory turnover ratio (365 days divided by 64) which can be considered an appropriate for the company with similar nature of the business. Days debtors has been decreasing by one day on year by year basis since 2012. This would suggest that the company is getting better in collecting its debts. Section k in notes 1 of ABC’s annual report 2014 stipulates that ‘trade receivables are due for settlement no…

Inventory is one of the most important assets that the companies possess. It is the primary source of revenue generation and earnings for the company’s shareholders and owners. The value of inventory depends on the inventory valuation methods; therefore, Redster Manufacturing Company’s product Ander presented in this paper. This paper is going to address about different types of inventory valuation methods that has been used to compute the cost of goods sold under perpetual system, FIFO and LIFO…