Goals Prepare a purchasing plan for inventory. Describe the perpetual and periodic inventory

methods. Determine how much inventory to keep in

stock.

Slide 1

Inventory Management

perpetual inventory method stock card point-of-sale software system periodic inventory method stock turnover rate

Slide 2

Terms

Slide 3

The Marketing Concept and the Product

The wants and needs of customers are the most important consideration when developing any product or marketing effort.

The U.S. market is consumer-driven.

Slide 4

Product Mix product mix

the different products and services a business sells

Entrepreneurs may carry some products that are not profitable because the products provide a convenience for customers.

Slide 5

Often a small percentage of the product selection makes up the majority of sales revenue.

The Small Percentage

inventory

the stock of goods a business has for sale

Inventory costs include: storage insurance taxes purchase price of inventory

Inventory must be well managed if you want to make a profit. Slide 6

Meet Inventory Needs

The sales forecast can be used to

calculate required inventory. Ending inventory =

Beginning inventory + Purchases ─ Sales

Slide 7

Purchasing Plan

Chapter 10

Slide 8

Chapter 10

Slide 9

What are some of the concerns managers have regarding inventory?

perpetual inventory method

monitors inventory levels daily efficient avoids inventory shortages

stock card a paper inventory record for a single

item electronic versions available

Slide 10

Track Your Inventory

the minimum amount you want to keep

in inventory indicates when you should place an

order to receive more inventory

Slide 11

reorder point

Slide 12

point-of-sale software system

updates inventory as each sale happens provides up-to-date inventory levels

Slide 13

Use a Computer

taking a physical count of merchandise at regular

intervals Take a Physical Inventory

counting and recording actual units should be done once or twice a year can highlight discrepancies caused by a failure

to record sales theft damage

Slide 14

Periodic Inventory Method

Slide 15

How does the perpetual inventory method differ from the periodic inventory method?

Costs of Carrying Inventory

Costs can increase for many reasons including: obsolescence deterioration interest fees insurance storage

Slide 16

Manage Your Inventory

Stock shortages can lead to:

loss of sales loss of customer loyalty

Inventory Turnover Rate the rate at which inventory is sold and replaced

with new inventory

Why is this important for you to know?Slide 17

Costs of Being Out of Stock

Complete the Inventory Management

Worksheet Complete the calculations:

- Yearly sales (quantity sold retail price) - ending inventory value (ending inventory retail price)

Answer the questions Email Mr. Farrar when you both parts are

finished.

You Task