· What is your company’s Inventory Carrying Cost rate? (Ask your Director of Logistics or the CFO. If that’s not possible, provide an estimation using all 4 categories presented in class.) Do you think it’s an accurate computation, a good estimate or a not-even-close estimate? Recommend one action that should be taken to improve the accuracy of this number.
Reply to the students response in 150 words and provide 1 reference
Information received from my company is that our Inventory carrying cost is about 22%. In discussion with the VP, he indicated great confidence with the number as we utilize a global ERP system that integrates all information to determine that figure.
A company’s inventory carrying cost can be described as the computation consisting of all the monetary resources in a company divided by the average annual proceeds. The monetary resources must include taxes and storage space of the inventory. The importance of inventory carrying cost is to determine how low or high the supply value is. This further determines the profitability of a company on an annual basis. Although this computation is not always reliable, a business or organization can ascertain that inventory management is part of company policies to increase sales and profitability.
Last in First Out (LIFO) and First in, First out (FIFO) are two types of inventory management. According to Stickney et al. (2009), companies in the US are always faced with decisions regarding which type of inventory management to use since both have advantages and disadvantages. However, LIFO is better because it computes tax in financial reports. Using either of these methods may provide a company with the required results, but it does not determine whether the inventory-carrying cost is accurate.
A good strategy targeted at mitigating this problem would be to keep the inventory levels as balanced as possible. An article titled, “How to Improve Inventory Carrying Costs and Management in the Supply Chain” states that control systems such as the computation of regular safety stock can also provide precise and reliable results. Another approach would be to have minimal inventory costs to pay off any pending loans and debts. This way, the company’s inventory and profit will increase. In essence, keeping company procedures and processes as simple as possible could also increase the accuracy of inventory cost estimation. As a consequence, this has the potential of also decreasing employee turnover and upsurging work motivation.
In conclusion, the inventory carrying cost provides a wide scope of what goes on in a business or company. For this reason, effective communication among employees and leaders should be paramount. Every worker should identify the needs of the company and deliver quality services. It is important to note that every business must also have a well-developed computer system to calculate the company’s inventory carrying the cost.
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.