Inventory System Summary
Inventory Systems Summary
Inventory systems are use in many different companies today as a tool to make sure the company strives into success. Inventory systems serve several different functions for businesses; one purpose is promoting the sales function by ensuring that a sufficient amount of product is available for customers. Another purpose is shrinkage control, that is monitoring the frequency of loss, theft, or breakage of products received. Another very important function of inventory control systems is asset valuation; that is establishing the value of the products on the shelf for tax purposes at the end of the tax year. According to the Small Business Administration, all inventory systems strive to strike a balance between managing costs and the business advantages of a broad selection of goods to offer to customers. All inventory systems, regardless of technology, require some element of visual inventory management. Point of sale, bar code, or stub control systems will all require manual verification periodically. Inventory Systems
Radio frequency identification inventory system is a system considered an IT tool that can meet the needs of both mobility and timeliness is radio frequency identification (RFID). Through radio signals a product tagged with RFID is put in memory until solid. The system has the ability to take into account inventory that becomes low and makes the necessary order to replace the product before the shelf is empty. With this technology in place it ensures the product will be in the right place at the right time to boost sales and streamline managing inventory. RFID decreased the amount of manual orders and replenished shed the product faster than the normal order process. The EPC electronic product code stores the object products from a worldwide perspective. The data representation capability of a Gen 2 tag is sufficient to provide unique identifiers for all items produced worldwide. The data representation capability of a Gen 2 tag is sufficient to provide unique identifiers for all items produced worldwide. Some problems with are RFID systems include reader collision, tag collision, signal disruption, system/data security, and consumer privacy. Perpetual inventory is keeping book inventory continuously with the stock that is on hand in real time. Many times when perpetual inventory is use in a store it is often paired with point-of-sale scanning equipment which allows sales to be recorded immediately. It also updates the system when an item is returned by a customer. When these items are recorded it allows the store to the ability to see when it needs to order more inventory and the count of goods sold. When using this type of inventory there is no need to do a yearend inventory unless there is a discrepancy of the inventory and the records. If this happens a journal entry is made debiting an inventory over and short account crediting the inventory but if the inventory shows more on hand then the inventory is debited over and short is credited. During perpetual inventory transactions the inventory will be accounted for in different ways. The perpetual system shows inventory purchases are debited to inventory during a given transaction. Freight, purchase discounts, allowances and returns are also debited to inventory transactions. The costs of goods are recorded by the real time of each sale with a debit to cost of goods sold. Physical inventory counts are done at least once a year to account for breakage, errors, theft, ect. Perpetual inventory is also best for business that have large inventory and a high turnover in there company and by using simple calculations to maintain inventory it helps with the lost of inventory and the high turnovers.
There are several ways that a bar code can be read. Some of the ways are scanning by a hand held, scanner that is attached to a computer or cash...
References: Brown F & Lin P, JULY 2006. The CPA Journal. Radio Frequency Identification and How to Capitalize on
It. What CPAs Should Know About RFID Technology. http://
Budding, J, Inventory Management, United States Small Business Administration, retrieved May 21,
2010 from http://www.sba.gov/idc/groups/public/documents/sba_homepage/pub_mp22.pdf
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