Discuss three common problems associated with inventories
1 . Inventories cost money. They are an investment in materials, labor, and overhead that cannot be realized until sold. Inventories also contain hidden costs. They must be transported throughout the factory. They must be handled, stored, and counted. In addition, inventories lose value through obsolescence.
2 . Inventories camouflage production problems. Bottlenecks and capacity imbalances in the manufacturing process cause WIP inventory to build up at the choke points. Inventories also build up when customer orders and production are out of sync.
3 . Willingness to maintain inventories can precipitate overproduction. Because of setup cost constraints, firms tend to overproduce inventories in large batches to absorb the allocated costs and create the image of improved efficiency. The true cost of this dysfunctional activity is hidden in the excess inventories.
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Which of the following retail growth strategies has the greatest chance for succeeding?
A. Retail format development growth opportunity B. Unrelated diversification growth opportunity C. Market expansion growth opportunity D. Related diversification growth opportunity E. Market penetration growth opportunity
If legally allowed, during periods of rising inventory values, a retailer using the FIFO (first-in-first-out) method could reduce its tax liability by _____
a. using the cost method of retail accounting b. maintaining a book inventory c. calculating deductions from retail value d. switching to LIFO
The geometric growth in the volume and nature of issues global leaders deal with is referred to as _______.
Fill in the blank(s) with the appropriate word(s).
Which of the following statements about business plans is least accurate?
A) For existing companies, the company description section should describe the company's founding, growth, sales, and profits. B) Investors are looking only for unique products or services. C) Start-up companies should explain in the product/service description section why the business will be profitable. D) The product/service description section should explain why your product or service is better than existing products or services.