INVENTORY

MANAGEMENT
GROUP 2
 Members

Kryston McLean
Trinity Hamied
Erica Dhookie
Dawn Kasseram
Tulsieram Harapasad
Kayla English
Gabrielle Smith
Amalina Singh
 Overview
Inventory Management
Methods used to maintain stock
FIFO
LIFO
AVCO
Demonstration of each
 INVENTORY MANAGEMENT

A way of controlling the flow of goods through a

business.

Goal- to always ensure sufficient stock is available to

fulfill the customer’s orders.
 Importance of Inventory
Management
Prevention of Pilferage (theft). This can be minimized by

Recruiting people who have good references.

Having a clear disciplinary policy (anyone caught stealing would be
dismissed).
Having secure storage spaces for valuable/desirable items.
Having regular stock reconciliations so pilfersge is soon
discovered.
 Inventory Control
Inventory Management is finding a balance between holding too little stock an
keeping too much:
Key tasks of controlling inventory are:

Recording all stock entering and leaving the store

carrying out stock reconciliations to check the accuracy of recorded stock

levels
 Inventory Control
Con’t
Setting maximum and minimum levels of stock for each item.

recording stock when its minimum level is reached and ensuring that the
amount held never exceeds the maximum level.
 Reporting on Stock Levels:

Periodically the value of items in stock can be

calculated:
FIFO - (First-In-First-Out
LIFO-(Last-In-Last-Out)
AVCO -(Average Cost)
 FIFO
This method assumes that the newest product has been
sold first.

March 9th March 3rd March 1st

The goods left at the end of the accounting period would

be the goods most recently bought.

March 9th
 FIFO
QUESTION 1
Receipts
January 1st - 100 @ $20
January 1st - 100 @ $20 February - 90 @ $25
February - 90 @ $25 March 15th- 80 @30
March 15th- 80 @30 April 1st- 90 @ $50
April 1st- 90 @ $50
 FIFO
Purchases Sales Balances
 LIFO
A method used to account for business inventory that
records the most recently produced items in a series as the
ones that are sold first.

March 1st March 3rd March 9th

The goods left at the end of the accounting period will be the
ones first bought.
 LIFO
QUESTION 1
Receipts
Issues
January 1st - 100 @ $20
February - 90 @ $25 March 1st- 80 @40
March 15th- 80 @30 April 1st- 90 @ $50
 AVCO
Average cost method assigns a cost to inventory items based on the
total cost of goods purchased or produced in a period divided by the
total number of items purchased or produced.
Average cost method is also known as weighted-average method.
Formula: Total costs of goods in stock/ number of items in stock.

TOTAL COSTS OF GOODS

Formula: NUMBER OF ITEMS IN STOCK
AVCO
GAME
TIME!