Explain why the lower of cost or market rule is used to value inventory.
What will be an ideal response?
The concept of conservatism requires that if there is more than one estimate of the value of an asset, then the lower of the two should be used. The lower of cost or market rule compares the acquisition cost of inventory with the current replacement cost. The lower of these two values is then selected as the amount to be reported. Lower of cost or market can be used on the inventory as a whole, major categories of inventory, or on individual items of inventory.
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Walmart's implementation of RFID, a type of technology that allows it to improve inventory tracking, is an example of a(n) ______ change.
A. reactive B. incremental C. proactive D. responsive E. radical
If Milt Alden focuses on overall costs of manufacturing plus profit in setting product prices, which strategy would he employ?
A) break-even pricing B) competition-based pricing C) value-added pricing D) cost-plus pricing E) good-value pricing
Mavrex, Inc received an application from Larry and, since his written qualifications seemed to meet a pressing current need, they hired him without checking his references or prior records. Actually, Larry had been in prison for murder several years
earlier. Tom, a long-time Mavrex employee, angered Larry when Tom tried to tell Larry how to do his job. Larry attacked and injured Tom. If Tom sues Mavrex, what would his cause of action be, and what elements would Tom need to prove to win his case?
Of all the activities of supply chain management, which poses the greatest challenge and why? Cite examples in popular media
What will be an ideal response?