Inventory Control

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Inventory Control
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Inventory Control

• Inventory refers to the amount of goods stored
  by a business.
• Controlling inventory is one way for a business
  to control profit and losses. The retailer must
  pay for inventory that is lost, damaged or stolen
  even though it is not available for sale.

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Inventory Control

• There are two methods that businesses can use to
  keep track of the inventory.
• 1. Perpetual Inventory
• 2. Physical Inventory

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Inventory Control

• Perpetual Inventory
• The point-of sale computer system will maintain
  a perpetual inventory.
• As new inventory arrives it is added to the
  inventory and as items are sold they are
  deducted.
• Using this method a business knows the exact
  amount of merchandise it has on hand.

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Inventory Control

• Physical Inventory
• Merchandise is visually counted to determine the
  quantity on hand.
• 1. Visual Inspection
• 2. Counting Stock

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Inventory Control

• Combined Systems
• To overcome the disadvantages of each system
  some businesses combine both systems to generate
  the most accurate system.
• The student store uses the combined method.
• Physical inventory every Thursday.

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Inventory Control

• Inventory Shrink
• Shrink occurs when the
• physical count shows less than the perpetual
  count.
• 1. Theft
• 2. Errors
• 3. Damage
• 4. Vendor Shortage

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Inventory Test

• Please describe the meaning of inventory?
• Controlling inventory is one way for a business
  to control
• _____________________?
• The two methods that a business can use to track
  inventory are?

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Inventory Test

• Please describe perpetual inventory?
• Please describe physical inventory?
• Please describe combined inventory tracking?

10
Inventory Test

• Please describe the meaning of Shrink?
• Please describe some of the reasons for shrink?