Think about the types of inventory systems used in business? Now that you selected the inventory,...

Think about the types of inventory systems used in business?

Now that you selected the inventory, briefly describe a business you would like to own or run, and choose the best inventory system for that business?

State why you made your choice as you did by stating advantages and disadvantages.

Solutions

Expert Solution

There are three inventory system used in business:

Manual Inventory System
Periodic Inventory System
Perpetual Inventory System

For big businesses, Perpetual Inventory System is best suited. Those businesses which have multiple locations, deals in expensive products or an electrinic store prefers perpetual inventory system. There are many advantages of perpetual inventory system :

Helps in preventing stock out,(Dstock out means product running out of stock)
Better accuracy as each inventory item will be recorded in separate ledger
Business owners can get valuable information such as purchases, purchase returmns and discounts easily.
Reduces hectic work of physical inventory count as regular inventory count is done.

In addition to advantages, there are certain disadvantages also :

High set up cost - As more new equipments to be purchased and inventory software to be set, this results in increased cost.
Training for New Equipments - It is another disadvantage of perpetual inventory system. When new equipments are installed, more training to emplopyees is required for better management.
Increased Monitorig - There will be need for increased monitoring. Employees can make mistakes in entering quantities and scanning inventory items, this requires regular and close monitoring.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Continuing with the company selected in Unit 2, think about the types of financial data that...

Continuing with the company selected in Unit 2, think about the types of financial data that would be included and excluded in the differential analysis. Propose which specific revenues and costs should be considered in an evaluation to drop or keep a: Customer Product line In addition, explain sunk and opportunity costs as they relate to your selected company. Should these costs be considered in differential analysis? Why or why not? The company is Caterpillar Data form unit 2 :...

Continuing with the company selected in Unit 2, think about the types of financial data that...

Continuing with the company selected in Unit 2, think about the types of financial data that would be included and excluded in differential analysis. Propose which specific revenues and costs should be considered in an evaluation to drop or keep a: Customer Product line In addition, explain sunk and opportunity costs as they relate to your selected company. Should these costs be considered in differential analysis? Why or why not? for a book publishing company, data from uni 2 NLC...

talk about inventory, there are two systems that can be used to track our purchases and...

talk about inventory, there are two systems that can be used to track our purchases and sales: the Perpetual Inventory System and the Periodic Inventory System. Please post your answers to the two questions below. 1.As a new business owner, which inventory system would you select? Please provide the details of this “make believe” new business. What were your consideration factors? 2.Which FOB Shipping Point and FOB Destination Point would you offer to your customers? What are the possible effects...

Now that you have learned about the Keynesian perspective, what do you think about it? In...

Now that you have learned about the Keynesian perspective, what do you think about it? In your post, be sure to describe they Keynesian viewpoint and how they would use both fiscal and monetary policy to achieve their goals. Do you think Keyes was right? Why or why not?

Explain the various types of inventory and differentiate between the two inventory systems.

talked about the two systems used to track inventory purchases and sales. This week, we're talking...

talked about the two systems used to track inventory purchases and sales. This week, we're talking about the four methods of valuing our inventory: Specific Identification, FIFO (first-in, first-out), LIFO (last-in, first-out), and Weighted Average. Each method can be used in the Perpetual Inventory System or in the Periodic Inventory System, and each method can be used for specific types of inventory. Following the new business ownership you adopted last week, please answer the two questions below about these costing...

Think about where you work now or a place in the past and thebusiness environment...

Think about where you work now or a place in the past and the business environment there. What do you feel is the number one financial risk, either systematic or nonsystematic? Summarize your description of the financial risk. How would you work to mitigate this risk?

Now that you know the effects of hormones on the control of metabolic rate, think about...

Now that you know the effects of hormones on the control of metabolic rate, think about what you can do in YOUR personal life style to keep your Cortisol levels under control, while keeping your Leptin levels up. Write a paragraph about it here.

Think about the different types of financial statements you learned about in this unit (the income...

Think about the different types of financial statements you learned about in this unit (the income statement, statement of retained earnings, balance sheets, and statements of cash flow). If you were an investor, would you place more emphasis on any one particular financial statement? Why, or why not?

Reactor Systems and Separation Systems Compare and contrast the different types of reactors used in a...

Reactor Systems and Separation Systems Compare and contrast the different types of reactors used in a refinery. Summarize your answer in a tabulated form. Explain the factors affecting the design of reactor systems.

Subjects