Inventory System Analysis

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  • Topic: Inventory, Inventory control system, Cost of goods sold
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  • Published : April 9, 2012
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Inventory Systems Analysis – Team C
QRB/501
April 2, 2012
Dr. Maryam Bolouri

Inventory Systems Analysis – Team C
Inventory systems are something in which practically every business needs to properly function. From the small business of just a few employees to the large corporations, inventory systems are a vital part of a business's success. The types of inventory systems will vary with the number of businesses that use these different kinds of systems. Team C will present findings on the research of various businesses and how those businesses use inventory systems that pertain to a specific industry. The organizations of research include companies, such as Infigen Energy, T-mobile, Wal-mart (RIM - Retail Inventory Method), Weis Markets (Demand-Driven Replenishment Solution) and Target (RIM - Retail Inventory Method). A summary of objectives, followed by a description and comparison of each system will describe the advantages and disadvantages of each system. A conclusion will follow that will summarize the collective findings of all systems listed above. Summary of Objectives

The ability to understand a company’s Inventory system is beneficial on a variety of levels especially concerning the financial statements. Our objective was to analyses how the private sector (government) agencies regulation the flow of inventory in regards to retail establishments. The information in the private sector has to be secured while retail companies make information readily available for customer service metrics. Comparing the advantages and disadvantages of the systems will be illustrated throughout the course of this dissertation.   T-Mobile Inventory System

The inventory control system is how a company locates objects and materials for typical business operations. The inventory system that T-mobile uses is a physical web-base tracking system that monitors the distribution levels on a corporate, and store by store level. This system tracks IMEI (specific phone bar codes) and phone model SKU numbers. This helps regulate levels of inventory so when products are low they will automatically replenish, to include inventory management to track item locations.

T-mobile also uses the inventory system to track the monthly and annual losses in retrospect to how much is going out by purchases and how much remains in the shelf. The method T-mobile uses is typically the average cost of inventory. What happens through mathematical equations is that the system tracks the value of the inventory with items returned, stolen, or sold. The total cost of goods sold helps the business understand pricing and regulation. 2011

Revenue from Continuous Operations – $64,602,000
Operating Expenses - $8,400,000
Inventory, Environmental Expenses – 36,259,000
2010
Revenue from Continuous Operations – $61,666,000
Operating Expenses - $6,833,000
Inventory, Environmental Expenses – 34,592,000
2009
Revenue from Continuous Operations - $62,516,000
Operating Expenses - $5,330,000
Inventory, Environmental Certificates – 35,337,000
2008
Revenue from Continuous Operations - $61,347,000
Operating Expenses - $5,432,000
Inventory, Environmental Certificates – 34,755,000

Equation for Establishing Total Cost of Goods
Beginning Inventory| +| Purchases| -| Ending Inventory| =| Cost of Goods Sold|

This is only the beginning steps to the inventory management system that offers T-mobile many benefits to delivering sufficient quantity control as well as inventory profit and losses. The Target Corporation is a retail based chain of stores that carries many different commodities. These commodities carry a full range of suppliers, which consolidate at the warehouse and store levels. To inventory these products, the corporation uses the retail inventory accounting method (RIM) method, incorporating the last in first out (LIFO) method (Target 2010 Annual Report, n.d.). The LIFO method focuses on the basis of inventory levels, mark-up, and...
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