Inventory Management: Planning, Coordination, Controlling Flow of Inventory

3. Using the variable costing method, which of the following costs are assigned to inventory?

330-10-30330-10-30-1 The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations. 330-10-30330-10-30-2 Although principles for the determination of inventory costs may be easily stated, their application, particularly to such inventory items as work in process and finished goods, is difficult because of the variety of considerations in the allocation of costs and charges.

Inventory planning is done through a stream of information, which is shared between vendors and allows independent vendors assess how much inventory is being made and allows everyone to be on the same page. This helps

6) Period costs are those costs associated with the manufacture of goods or the providing of services.

Inventory planning method use a common information base to coordinate inventory requirements across multiple locations or stages in the supply chain. Planning activities may occur at the plant warehouse level to coordinate inventory allocation and delivery to multiple

goods. They can also be in process between different locations. Holding of inventories can cost a

26. ____________ refers to being out of an item at the same time there is demand for it.

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In order to determine and take a dispassionate view about what lies beneath the surface of accounting figures, a financial analyst has to make use of different management accounting techniques. Cost techniques have a precedence over the other techniques since accounting treatment of cost is often both complex and financially significant. For example, if a firm proposes to increase its output by 10%, is it reasonable to expect total cost to increase by less than 10%, exactly 10% or

The Production cost originates with the process of supplying material labor and services and finishes with ________ of the finished product.

Inventory itself is a list of products that a company has available for sale to customers. So what is Inventory Management? By definition according to BusinessDictionary.com, “Inventory Management is policies, procedures, and techniques employed in maintaining the optimum number or amount of each inventory item”.

JIT minimizes “quality problems” that can result when parts sit around for a long time. JIT stresses the importance of minimizing waste. A company that uses JIT is from the school of though of feeling like they have a need for continuous improvement. The JIT viewpoint on improvement is “if it’s not perfect, make it better” instead of “it’s good enough.” JIT minimizes “quality problems” by using pull quick setups and small lots and by using flexible resources and efficient facility layouts. If parts aren’t sitting around wasting space and money then there is less of a chance for the parts to go bad.

“Inventory is one of the most expensive and important assets to many companies, representing as much as 50% of total invested capital. Managers have long recognized that good inventory control is crucial” (Render et al, 2011). Therefore, it is really no surprise that companies place such a high importance on inventory control. An analysis of the planning and forecasting process, as well as the uses of inventory control will certainly verify the significance of inventory control in the business environment. In addition, by utilizing several inventory methods: economic order

A good inventory management represents the organisation with the right amount of product, at the right time, at the right place, and at the right cost. Inventory system is a guideline to monitor and control the inventory level, and determine the optimal amount of stock that the company needs to hold in order to satisfy customer demand. There are three aspects of manage inventory system, which are inventory planning, inventory management, and inventory control.

Inventory management is a topic that has been captured the attention of academic and business communities for long time. Of the most important points that investigated by academicians and practitioners for decades is the selecting of the Economic Order Quantity (EOQ). As the name suggests, EOQ is the order quantity that minimizes total inventory cost. Despite the many variants of the EOQ that have appeared in the literature to fine tune it to reality, it still has limitations. A major one is that it does not take into account the hidden costs inherent in inventory systems. Some of these costs relate to sustainability issues including environmental, social labor, and economic effects. This research proposal considers some of these costs,