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Category: Business and Industry
Date Submitted: 03/11/2013 07:10 PM
Team B Inventory Systems
Ian McDaniel, Renata Drobinski, Stephanie Boyd, Wendy Paraison
University of Phoenix
Quantitative Reasoning for Business ORB/501
Kenneth La Cour
July 16, 2012
Inventory Systems
Inventory systems are tracing methods that report the amount of unprocessed resources, supplies, or final items promptly accessible. The inventory system is revised every time an item or raw materials are used to produce a merchandise, to provide information about available resources for the following day or week. Inventory systems also permit forecasting the demand so products can be ordered in advance. Inventory can be performed by means of numerous methods.
For the purpose of this paper the most common of the methods are the JIT (Just-in-Time), FIFO (First-in-First-out), LIFO (Last-in-First-out), and Weighed Average Cost Method (WAC) will be reviewed and compared. Many businesses modify its inventory methods to meet the necessary strategic plan, so that business operates smoothly and successful.
Descriptions of Inventory Systems
Just In Time Inventory Method
Companies have been using different types of inventory methods to see which one would work best for the company. The company has forecasted the demand of the product in which is needed to be manufactured in time for the demand. Just in time inventory method helps to smooth out the production and help to meet the demands. Forecasting the demand of the product will help to determine when employees may need to be hired if there is not enough manpower to meet the demand. The just in time inventory method is a production and inventory control system in which materials are purchased and units are produced only as needed to meet customer demands (Accounting for Management, 2012).
When companies use the just in time inventory method, the inventory can be a few for the customer’s order or as little as zero. The inventory can be zero because of the demand is not there and when the demand is there the...