Inventory Management

Furthermore, according to the 2016 Annual Report, Woolworths’ cost of inventories is determined on a weighted average basis. The weighted average method is perceived to assume that items are of similar nature (Carlon et al. 2016). This method would lead to identical goods being allocated to the same price using the weighted average unit cost, which can then be applied to calculate the cost of ending inventory (Carlon et al. 2016). For this particular case, Woolworths Limited, as a commercial entity, regards the cost of inventory to be difficult to measure due to the high turnover rates and accessibility costs of different products.

The ABC system shows that the business customers are profitable and the retail customers are not, the opposite of what the original system shows. A manger would try to increase business customers and increase fees for retail customers.

Inventory levels over the past 4 years have remained on an increasingly consistent track as their revenue has risen. According to Best Buy (2010), this rise in revenue and assets is partly due to the fact that they enter new markets and open new stores across the world. The latest opportunities that they have come across include new stores in Europe and other areas overseas. This is new territory for Best Buy but has been a successful venture based on their flexibility with their inventory systems that they have in place. The following table presents the last five year financial highlights according to the Financial Statements and Supplementary Data of Annual Report on Form 10-K. (Investor Relations, 2010) Five-Year Financial Highlights

Under an ABC system, the allocation of costs to products is achieved through at least four analytical steps. Firstly, costs are grouped into activity levels. Secondly, cost drivers are

Since overhead at the Chicago plant is high, accurate cost accounting system is required. Different types of dolls require different amounts of machine hours, setups, production runs, shipments, etc. By using ABC, different manufacturing overhead would be allocated to each type of doll, giving result to different contribution margins.

ABC is a method utilized by organizations to establish costs for each product or service that the business provides. The ABC method utilizes cost drivers to determine indirect cost, as well as direct costs and volumes to ascertain costs that pertain to the product or service that the business delivers (Nowicki,

point of sale system. The POS system is a perpetual inventory counting method that electronically records items immediately upon their point of sale (Stevenson, 2015, pg. 552). In other words, as a cashier scans a customer 's groceries, each scanned item is automatically recorded in the system and deducted from the store’s inventory. Implementing a point of sale would benefit a business’s inventory management function in several ways. First, the POS system will provide managers with a continuous flow of updated information (Stevenson, 2015, pg. 552). As a result, the information will provide more accuracy when used for sales forecasts and analysis, which substantially affect inventory decisions. Continuously, this inventory system would also allow greater flexibility in the sense that it can be wirelessly linked to the main company’s inventory system, creating a network of the company’s inventory systems. The POS system is capable of tracking many operations at once and can be modified according to management’s needs (MacCarthy, n.d.). This flexibility would undoubtedly benefit a large company like Wegman’s with many store locations. Lastly, the system is able to help businesses maintain a high level of customer service. Because the system gives customers a receipt with the price and quantity of each item purchased, the customer is able to see exactly what he or she purchased. This practice

The Dodgers retail store has incurred costs of $2,769,900 for their apparel for the 2015 year. The average finished goods inventory is $92,330. The inventory turnover ratios for finished goods would be 64.6. This was calculated by dividing the incurred costs by the average finished goods inventory. The store will carry 3.91 days’ worth of inventory (253 divided by 64.6). The proposed way to manage the apparel inventory is to ensure the inventory is used every four days. However, also proposed is enough inventory is on hand in the case of unforeseen boom in sales.

The ABC method means that all the individual activities part of a process can be accurately cost. This is what Super Bakery needs to set the value of the company based on the activities of individual assets (management, staff, manufacturing and warehouse). The activity- based cost system allows the company to identify where high (and low) costs are being incurred and the cause. How can a company survive with a 20% growth rate in twenty year duration? The desire to change was required and ABC is the best cost system for Super Bakery. The ABC method helps with future product planning and the cost of all activities associated with a product or service can be accurately determined before it is launched. This can help with determining pricing, and any associated expenditures of the company.

Imagine that you have just earned your business degree and have been hired as a hospital administrator at a small hospital that, like many others, is experiencing financial problems. Having studied finance, you know that efficient cash management is important to all firms in all industries to meet the day-by-day operations of the firm. One way to ensure such efficiency is to use a carefully planned and managed inventory control system that can reduce the amount of cash an organization has tied up in inventory. Being familiar with Just-In-Time Inventory, you know it is a proven system that helps reduce the costs of managing inventory.

I have taken it upon myself to test two inventory management systems and have found a system that will yield the least cost to Parts Emporium Inc. The two systems I have tested are the Continuous Inventory System and the Periodic Inventory System. Using data that I have gathered from the products DB032 and the EG151, I have compiled calculations and have concluded a continuous inventory system would be best for our corporation. Attached you will find said calculations; I would like to take this moment and present the continuous inventory system and recognize all of the relevant costs. The following is an explanation of each calculation under the continuous inventory

Implementing an inventory tracking system. This business strategy aligns with RR’s plan to provide warehouse services to its customers. By implementing an inventory system customers will be able to keep track of how much stock they have stored in the warehouse.

ABC systems have the flexibility to provide special reports so that management can take decisions about the costs of designing, selling and delivering a product or service. The key aspect is that ABC focuses on accumulating costs via activities, whereas traditional cost allocation focuses on accumulating costs within functional areas.

In a literal sense, inventory refers to stocks of anything necessary to do business. These stocks represent a large portion of the business investment and must be well managed in order to maximize profits. In fact, many small and large businesses cannot absorb the types of losses arising from poor inventory

Since inventory constitutes a major segment of total investment, it is crucial that good inventory management be practiced to ensure organizational growth and profitability. According to Temeng Eshun & Essey, 2010) organizations have ignored the potential savings from proper inventory management, treating inventory as a necessary evil and not as an asset requiring management. As a result, many inventory systems are based on arbitrary rules. Unfortunately, it is not unusual for some organizations to have more funds invested in inventory than necessary and still not be able to meet customer demands because of poor distribution of investment among inventory items (Temeng et al 2010). In addition to this, Inventory is the stock of any item or resource used in an organization. An inventory system is the set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be, (Chase &