Traditional Accounting Treats Inventory Discussion Assignment
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Traditional Accounting Treats Inventory Discussion Assignment
What? Pareto again?
“A” items account for a large dollar value but relatively small percentage of total items (e.g., 10% to 30 % of items, yet 60% to 80% of total dollar value).
“C” items account for a small dollar value but a large percentage of total items (e.g., 50% to 60% of items, yet about 5% to 15% of total dollar value). These can be managed by automated systems.
“B” items are between A and C.
ABC Inventory (Pareto) Analysis
ABC Inventory (Pareto) Analysis
Just-in-Time (JIT) production system was introduced at Toyota a half-century ago.
Traditional factories use a push system, which produces finished goods inventory in advance of customer demand using a forecast of sales.
The JIT or pull system, products are not produced until the customer demand is more certain or confirmed. Then items are “pulled” from the source or the suppliers “just in time” to make the required parts and products for the customer. The result is lower inventory throughout the system.
Just-in-Time Systems
Traditional accounting treats inventory as asset, the more the merrier.
Just-in-Time (JIT) treats inventory as (necessary) evil and tries to avoid keeping it at all costs. Inventory is nothing but trouble (expensive) in a JIT system.
Just-in-Time Philosophy
Damages Mark downs Theft or pilferage
VMI is where the vendor (e.g. a consumer goods manufacturer) monitors and manages the inventory for the customer (e.g. a grocery store). ⁻ Chevron monitors gasoline levels then delivers
fuels to gas stations…automatically. ⁻ Pepsi comes into Von’s to restock.
Vendors love to do more for customers. Why?
Vendor Managed Inventory (VMI)
Who is responsible for making sure all products face front and shelves are fully stocked?
Who should be blamed for empty shelves? And who lost?
Inventory Velocity (Turnover)
Inventory turnover is a ratio that measures the number of times inventory is sold or consumed in a given period of time.
It’s also known as inventory turns, stock turn, and stock turnover. The inventory turnover formula is calculated by dividing the cost of goods sold (COGS) by average inventory.
Inventory Velocity (Turnover) Cash to cash cycle: time from the acquisition of a firm’s inventory to the time that specific inventory is sold and money received. It is usually measured in days.
Inventory Velocity Among Retailers Groceries: 13.5; Apparel retail: 3.5; Dept stores: 4
Costco: 12; Walmart: 8.5; Target: 6; Home Depot: 5
How Fast is Fast Fashion?
Turnover ratio 3-4 5 3 4
Zara Front-Positioned Inventory
Inventory Turnover: Amazon v Apple
Square root law: Number of stock points (warehouses or DCs or stores) increases by X times, total inventory increases by the square root of X times.
The Square Root Law in Inventory Management
How much inventory has increased at Amazon?
Amazon Fulfillment Centers
Amazon Growing Logistics Costs
Discussion Questions Please research the following questions and provide evidence to support your answers. Everyone: Compare and contrast Just in time and Just in case inventory management thoughts in the Lean context. Everyone: Analyze and answer questions of the slide on Monthly Retail Sales and Inventories, U.S., 1992-2019 Everyone: Discuss the costs and benefits of Type A vs. B drivers as shown in my PPT slide on inventory trade-offs. What’re the lifetime costs/benefits of type B drivers? Everyone: Why did Amazon’s inventory turnovers drop from 16 to 8? And what happened to Apple’s from 80-100 around 2012-13 to about 40 in 2017-20? Can you explain?
Group Discussion Be sure your group is ready to lead and/or discuss the following question in class, with research or facts-based evidence. This is the $64,000 question: Are you concerned about Amazon’s growing logistics costs if you were the COO of Amazon? What would you do if you think it’s a concern?
What would your conversations be with the CEO and with the logistics managers? This week’s journal article was focused on the Complexity of Information Systems Research in the Digital World. Complexity is increasing as new technologies are emerging every day.
This complexity impacts human experiences. Organizations are turning to digitally enabled solutions to assist with the emergence of digitalization. Please review the article and define the various technologies that are emerging as noted in the article. Note how these emerging technologies are impacting organizations and what organizations can to do to reduce the burden of digitalization.Be sure to use the UC Library for scholarly research. Google Scholar is also a great source for research. Please be sure that journal articles are peer-reviewed and are published within the last five years.The paper should meet the following requirements:
3-5 pages in length (not including title page or references)
APA guidelines must be followed. The paper must include a cover page, an introduction, a body with fully developed content, and a conclusion.
A minimum of five peer-reviewed journal articles.
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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