Compare and contrast the management of finished goods inventory in a manufacturing firm with that in...

Compare and contrast the management of finished goods inventory in a manufacturing firm with that in a retail or wholesale firm.

Expert Solution

The management of finished goods inventory in a manufacturing firm depends upon 3 type of inventory that is the raw material which should produce finish good, work in progress and finished well.

So, for a retail firm, they maintain only a stock of finished goods and seek finished well only. Retail doesn't keep raw material or work in progress as they cannot manufacture a large amount of product. As the demand for raw material and work in progress highly depends upon the demand for finished goods. So, they create more demands for finished good

For wholesale firm, they use to produces and sell a large stock of products at a time. So, there is a high need for raw material and work in progress goods which creates a high demand for the finished goods as well in bulky stock.

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