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Exam 4 Outline 3042

Exam 4 Outline 3042 - Chapter 10-Controling Inventories...

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Chapter 10-Controling Inventories Inventory control systems o Inventory control systems: these control systems involve the maintenance of stock levels in relation to changing consumer demand—vary by type and size of the business and the kind and amount of information. o Benefits: The proper relationship between sales and inventory can be well maintained. Inventory control systems provide you with information needed to take markdowns by identifying slow-selling merchandise. Allows buyers to identify best-sellers early enough in the season so that reorders can be placed to increase total sales for the store or department. Shrinkage: can be identified using inventory control systems. Excessive shrinkage wll indicate that more effective merchandise controls need to be implemented to reduce employee theft or shoplifting. o Buyers must establish a control process tat allows them to analyze the current situation in relation to merchandise plans and correct any deviations. o The control system allows you to determine mistakes that have been made or identify areas that need your immediate attention. the inventory control system must also provide information in a timely manner to allow you to make decisions while problems can still be corrected—two basic types: perpetual and periodic Perpetual control system: recording business transactions such as sales, purchases, returns, and transfers on a continuous basis. Stores using perpetual control systems do not have to take actual counts of their stock except for regularly schedules physical inventories. Two types of perpetual control systems— manual and computerized o Manual: some stores still maintain perpetual inventory control by manually recording transactions on inventory control forms. Inventory records are updated as transactions occur or on a daily or weekly basis by designated employees. Can be slow, sometimes forms are late, information is little use to buyer, sometimes can be incorrect o Computerized: merchandise information is automatically collected and processed for every transaction occurring at the POS (point-of-sale) register, providing the buyer or manager with up to date sales and inventory data. Improves speed, accuracy and efficiency of recordkeeping. Require that each item of merchandise be coded to identify specific information about it, such as department, classification, vendor style, color, size, or price. Identifying merchandise by such specific characteristics involves unit control. Maintaining a unit control system requires coding each item—SKU (stock keeping unit) numbers identify a single item of merchandise within a merchandise classification. Any stores use UPC (universal price code) The code is “read” by a scanner and the information updates the store’s inventory records.
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There is less danger of salespeople making errors when merchandising is coded and scanners are used to record transactions.
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