Inventory Systems Summary

1584 WordsAug 21, 20107 Pages
Inventory Systems Summary: Learning Team A Michelle Grace, Scot Breland, Marie J. Charles, and Nate Kirkland QRB/501 Quantitative Reasoning for Business 1 July 2010 Dr. Robert Kalle Inventory Systems Summary: Learning Team A Learning Team A met to discuss details of the assignment to analyze, compare, and contrast four inventory systems in preparation for future assignments (Breland, Charles, Grace, & Kirkland). The analysis presented describes four inventory systems as described and analyzed by each team member. Also included in the inventory systems analysis are four comparisons presenting the advantages and disadvantages of each inventory system with an overall ranking provided in summary. Learning team interactions via…show more content…
Vendors use Electronic Data Exchange software packages to determine quantity sold, quantity on-hand, quantity on order, quantity received, and forecast quantity (Murray, 2010). Advantages. One of the main benefits of VMI is that the vendor is responsible for supplying the customer. Because the vendor supplies the customer, the customer requires less stock and warehousing requirements. Lower inventories can equate to lower costs for operations. Additionally, since the vendor receives data and not purchase orders purchasing departments experience significant operational costs savings. Finally, purchase order reconciliation is also removed (Murray, 2010). Disadvantages. The main disadvantage to VMI is that significant control is relinquished to the vendor. Customers are reliant on an outside party to successfully manage supply transactions removing significant oversight. A lesser disadvantage is that since VMI is managed through electronic means exclusively, VMI is subject to compute and other electronic malfunctions. (Murray, 2010). Inventory System Three: Perpetual Inventory Method Description. Perpetual Inventory Method (PIM) is known to be used by many financial institutions. PIM system maintains an up-to-date record of accurate level of goods at hands by ensuring that stocks are accounted for at all times (Dey-Chowdury, 2008). The process includes details of all recording purchase and sales receipts, and issues and

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