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PAF – Karachi Institute of Economics and Technology North Campus

Course: Inventory Management
Faculty: Haris Malik
Class ID:
Date: 23rd January 2018

10 Marks

OBJECTIVE: The objective of this assignment is to work in a group setting and
to expose you to a “first hand” application of the concepts we discuss in class
regarding inventory systems and internal controls. The assignment requires
that each team visit a different local retail business

 Select a “team” to work with. Each team should be made up of 3 to 5
students. If you do not select a team for yourself, the instructor will create
the teams. Select teams by __________.

 Select a local retail business to visit, such as a hardware store, clothing store,
appliance store, music store, book store or grocery store. The store may be a
branch of a larger company. Select store by __________. Post the name of retail
business that you have selected (and your group member’s names) on the
message board in the Road Trip Folder on Angel. REMEMBER IT IS A BUSY
TIME FOR MOST RETAILERS. Be sure to have a few “back ups” in mind.

 Make an appointment to visit the business and interview the store manager
for approximately 30 minutes about the company’s inventory accounting
system, asking the following questions and any additional questions:

Inventory Accounting System
a. Does the business have a computerized or manual inventory system?
b. What is the physical flow of merchandise into the store, and what
documents are used in connection with this flow?
c. What documents are prepared when the merchandise is sold?
d. Does the store keep perpetual inventory records? If so, does it keep
the records in units only, or does it keep track of cost as well? If not,
what system does the store use?
e. How often does the store take a physical inventory?
f. What procedures are followed in taking a physical inventory?
g. What kinds of inventory reports are prepared or received?
h. How are the financial statements generated for the store?
i. What method does the company use to cost its inventory?

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documents and records.  Prepare a 5-7 minute PowerPoint presentation on your findings to be presented in class on __________. etc. physical controls. periodic checks. No written report required. including authorization. recording transactions. Internal Control Structure:  How does the company protect against inventory theft and loss? What control activities. BE CREATIVE : IT COUNTS AND MAKES FOR AN INTERESTING PRESENTATION!! Page 2 of 2 . what products it sells. and sound personnel policies. does the company use?  Can you see these control procedures in use? Be sure to record any other interesting observations your group has made while in the store. separation of duties. Presentations will be evaluated based on a set of established criteria. Be sure to include what type of business it is.