Inventory Systems Paper

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Inventory Systems Summary

Inventory control systems are used so that companies can track materials or products. Before technology was so readily available, employees of companies had a harder time tracking inventory. Today one can go into a large retailer and ask an employee to check if an item is in stock and all the employee would have to do is check a little hand held device. The four types of inventory systems that Team A decided to research and discuss were: Advanced Tracking System (ATS), Perpetual Inventory System, Periodic Inventory System, and Just-In-Time Inventory System.
Advanced Tracking System (ATS)
Advanced Tracking System, or ATS, is a system that operates standalone or front-end that interfaces with almost any
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It is also well suited for the type of industries where there isn't much processing to do, so the inventory exists at only one level (for sale) rather than at three levels (raw materials, work in progress and for sale)” (Kulkarni, 2010).
Periodic Inventory System A periodic inventory control is a system with no continuous record of changes. Inventory is only tracked periodically instead of per the transaction. At the end of a specific period, usually an accounting period; quarterly or monthly, the ending inventory is found by a physical count. The cost of each item is computed and deducted from the sum of purchases and the beginning of the inventory to calculate cost of goods sold (Business Dictionary, 2010). The periodic inventory system keeps the inventory balance at the same value that it was at the beginning of the period. The inventory level is not updated after purchases, for accounting purposes; this system uses an account called purchases at the end of the period, rather than debiting inventory.
Just-In-Time (JIT) Inventory System
Just-In-Time inventory system known as JIT is one of inventory systems used in companies to deliver a finished product to customers quickly to reduce the overall ordering and inventory holding cost (Atkinson, 2005). The system proves to be most effective for companies that lose money for holding a product in its inventory for an extended period of time and
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