Inventory Management Concepts and Practices

The video tutorial covers the essentials of inventory management, focusing on monitoring and controlling inventory levels. It explains inventory turnover, its calculation at retail and cost, and the significance of turnover ratios. The tutorial also discusses inventory tracking systems, including UPC and RFID technologies, and explores future advancements in inventory management.

Why is it important for management to monitor and control inventory levels?

• To increase production costs

• To decrease employee workload

• To avoid paying taxes

• To ensure product availability and reduce waste

What can cause inventories to become too large?

• Increased marketing efforts

• Efficient supply chain

• Business recession or unpopular products

• High consumer demand

What are the two main concepts for businesses regarding inventory?

• The size of the warehouse and its location

• The number of employees and their salaries

• The type of products and their colors

• How quickly merchandise moves and its worth

How is average inventory calculated?

• By subtracting the smallest inventory value

• By dividing the total inventory by the number of products

• By finding the mean of inventories over a time period

• By multiplying all inventory values

What does inventory turnover indicate?

• The total revenue of a company

• The number of products in a warehouse

• The number of employees in a company

• The speed at which inventory is sold

Which type of business is likely to have a high inventory turnover?

• Furniture store

• Real estate agency

• Car dealership

• Flower shop

What is the first step in determining inventory turnover?

• Hiring more staff

• Reducing product prices

• Computing average inventory

• Calculating total sales

How is turnover at retail calculated?

• By dividing retail sales by average inventory at retail

• By adding retail sales to average inventory at retail

• By multiplying retail sales by average inventory at retail

• By subtracting retail sales from average inventory at retail

What is a common cause of variation in turnover ratios?

• Employee turnover

• Inventory shrinkage

• Product innovation

• Market expansion

Why do businesses prefer turnover at retail?

• It requires less data

• It is easier to calculate

• It results in higher profits

• It is more conservative