Inventory System Analysis

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Inventory Systems Analysis – Team C QRB/501 April 2, 2012 Dr. Maryam Bolouri Inventory Systems Analysis – Team C Inventory systems are something in which practically every business needs to properly function. From the small business of just a few employees to the large corporations, inventory systems are a vital part of a business 's success. The types of inventory systems will vary with the number of businesses that use these different kinds of systems. Team C will present findings on the research of various businesses and how those businesses use inventory systems that pertain to a specific industry. The organizations of research include companies, such as Infigen Energy, T-mobile, Wal-mart (RIM - Retail Inventory Method), Weis…show more content…
This system uses the cost to retail ratio calculated against the retail value inventory to establish the lower cost or market (Target 2010 Annual Report, n.d.). This is due to permanent markdowns in price. These markdowns are a result of sale, damaged goods, overstocking, and competition. Target uses a program where venders do not charge the company for the products they stock until they are sold. These quantities are figured into the sales of the consolidated statements of financial position, but they are not considered inventory. Using the RIM method of inventorying, there are multiple components needed to satisfy the equation. It needs the beginning inventory quantity cost and retail price, current purchases cost and retail price, markups and cancellations, markdowns and cancellations, and net sales. Using these components, a cost to retail ratio is formed. Once this is formed, the sales are subtracted. This ends with the result of the inventory. This system tends to be more popular than the gross profit method because it is based on cost-to-retail percentage rather than historical gross profit ratio ("Appendix D, Retail Inventory Method", n.d.). The following is four years worth of quarterly inventories of Target Retail Corporation: Target Inventory Data 2007-2012 Jan. 31, 2012 | 7.918B | Oct. 31, 2011 | 9.89B | 31-Jul-11 | 7.926B | 30-Apr-11 | 7.696B | Jan. 31, 2011 | 7.596B | Oct. 31,

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