1⟩ Tell us what Should Be Recorded In A Physical Count Of Inventory?
When conducting a physical inventory the classification, location and number in stock of a good should be recorded.
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2⟩ Tell me what does EOQ stand for?
EOQ stands for Economic Order Quantity.
3⟩ Please explain what is total stocking cost?
Total stocking cost is the cost to the store of holding a good in its inventory. The stocking cost consists of the carrying cost times half the quantity in inventory and the order completion cost times demand divided by the quantity.
In its mathematical form the cost is represented by TSC=(Q/2)C + (D/Q)S.
4⟩ Tell us what is forecasting?
Forecasting is the process of estimating the future demand of a product.
5⟩ Tell me what Is Raw Material?
Are those basic inputs that are converted into finished product through the manufacturing process. Raw materials inventories are those units which have been purchased and stored for future productions.
6⟩ Do you know what Is Total Stocking Cost?
Total stocking cost is the cost to the store of holding a good in its inventory. The stocking cost consists of the carrying cost times half the quantity in inventory and the order completion cost times demand divided by the quantity. In its mathematical form the cost is represented by TSC=(Q/2)C + (D/Q)S.
7⟩ Tell me what is a order point?
A order point is a point in time at which a order is placed to replenish goods in inventory.
8⟩ Explain me when should a physical inventory be taken?
A inventory should be taken at least once a year. If items are perishable, seasonal or highly demanded a inventory should be taken more often.
9⟩ Tell us does the model always work?
No, the model only works for those cases that meet its assumptions.
10⟩ Tell us do You Know What Is Cogs (cost Of Goods Sold) Formula?
For manufacturers, “cost of goods sold” (COGS) is the cost of buying raw materials and manufacturing finished products.
For retailers, it's the cost of obtaining or buying the products sold to customers.
Opening Stock (Beginning inventory) + Purchases – Closing Stock (End Inventory) = COGS
If the company is in a service industry, COGS is the cost of the service it offers.
COGS can help companies work out how much they should charge for their products and services, and the level of sales they need to sustain in order to make a profit.
The price paid for products is particularly crucial to retailers, as it is often their greatest area of expenditure. But all businesses can benefit from an analysis of COGS, as it can highlight ways of improving efficiency and cutting expenditure.
11⟩ Tell me do I Need To Recompute Stocking Costs For The Eoq Level?
Yes, in order to compare stock costs when using the EOQ model you must compute the costs for both the original level and the EOQ level of order quantities.
12⟩ Tell us can forecasting help in controlling inventory?
Yes, through the use of forecasts inventory levels can be set to meet the demands while keeping levels as low as possible.
13⟩ Explain me what is the importance of EOQ?
The EOQ level is the point at which stocking costs are at their lowest point for a given item.
14⟩ Explain me what does inventory affect in a store?
Inventory levels and their values can affect the income of the store, the amount of taxes paid, and the total stocking cost.
15⟩ Explain me if inventory controls are followed, what can I expect?
By following your inventory policy you should be able to realize important advantages in inventory control. The first is reduced costs for inventories, along with reduced amounts of inventory. Theft and shrinkage should also be reduced if inventory policy is followed. The final benefit will be increased profits for the store.
16⟩ Tell us how can the value of inventory be determined?
The value can be found using four methods in inventory control. The first is the specific cost in which each item's cost is added together for the inventory's value. A second method is to use the weighted average of the costs for a period to determine value. A third method is first in, first out. In this method value is measured using the latest costs of goods while working towards the beginning of the period until all goods in inventory are valued. The final method is last in, first out. In this method the costs of gods at the beginning of the period are used to determine the inventory's value much like FIFO.
17⟩ Tell us what is an order quantity?
An order quantity is the amount of goods that an order requests be shipped to the store.
18⟩ Tell me do You Know Who Decides Key Inventory-related Policy Such As Striking The Right Balance Between Customer Service And Cost-effective Product Inventory Levels?
Many decisions about inventory levels are strategically important. So instead of relying solely on the supply organization to decide, executives need to have a major say in the fundamental issues that impact inventory management-everything from determining the right breadth and complexity of product offerings to optimal plant and distribution footprints.
19⟩ Please explain are You Able To Break Down Your Operating Inventory Into The Three Major Categories When Reporting Levels-safety, Replenishment And Excess Or Obsolete Stock?
This breakdown makes it easier to make sound decisions about appropriate levels for each of these three areas. It helps determine the minimum safety stock needed to provide an insurance policy against supply chain problems either from manufacturing glitches or distribution uncertainties so that customers get what they ordered.
It's useful for pinpointing the amount of inventory required to replenish deliveries every two weeks. And it helps companies find ways to avoid a backlog of excess or obsolete inventory.
20⟩ Please explain what Is Shrinkage Calculation In Inventory?
In financial accounting, the term inventory shrinkage is the loss of products between point of manufacture or purchase from supplier and point of sale. The term shrink relates to the difference in the amount of margin or profit a retailer can obtain. If the amount of shrink is large, then profits go down which results in increased costs to the consumer to meet the needs of the retailer.
In retail terms, shrinkage refers to a company's percent loss resulting from damage, product expiration and theft of unsold products. Retail shrinkage can happen anywhere along the production and sale chain, including at the factory, in transit or at the retail location.
You can calculate retail shrinkage by dividing the value of goods lost to shrinkage by the total value of goods that are supposed to be in the inventory.
Shrinkage =
( Total value of the goods that you are supposed to have in your inventory - Total value of the goods that is physically stocked in your inventory )
/ Total value of the goods that you are supposed to have in your inventory.
i.e. Shrinkage = (Book stock - Actual Stock) / Book Stock
= Total Value of goods lost / Total value of the goods that you are supposed to have in your inventory
