 Goals  Prepare a purchasing plan for inventory.  Describe the perpetual and periodic inventory methods.  Determine how much inventory to keep in stock. Slide 1 Inventory Management

  perpetual inventory method  stock card  point-of-sale software system  periodic inventory method  stock turnover rate Slide 2 Terms

 Slide 3 The Marketing Concept and the Product  The wants and needs of customers are the most important consideration when developing any product or marketing effort.  The U.S. market is consumer-driven.

 Slide 4 Product Mix  product mix  the different products and services a business sells  Entrepreneurs may carry some products that are not profitable because the products provide a convenience for customers.

 Slide 5 Often a small percentage of the product selection makes up the majority of sales revenue. The Small Percentage

  inventory  the stock of goods a business has for sale  Inventory costs include:  storage  insurance  taxes  purchase price of inventory  Inventory must be well managed if you want to make a profit. Slide 6 Meet Inventory Needs

  The sales forecast can be used to calculate required inventory.  Ending inventory = Beginning inventory + Purchases ─ Sales Slide 7 Purchasing Plan

 Chapter 10Slide 8

 Chapter 10Slide 9 What are some of the concerns managers have regarding inventory?

  perpetual inventory method  monitors inventory levels daily  efficient  avoids inventory shortages  stock card  a paper inventory record for a single item  electronic versions available Slide 10 Track Your Inventory

  the minimum amount you want to keep in inventory  indicates when you should place an order to receive more inventory Slide 11 reorder point

 Slide 12

  point-of-sale software system  updates inventory as each sale happens  provides up-to-date inventory levels Slide 13 Use a Computer

  taking a physical count of merchandise at regular intervals  Take a Physical Inventory  counting and recording actual units  should be done once or twice a year  can highlight discrepancies caused by a failure to record  sales  theft  damage Slide 14 Periodic Inventory Method

 Slide 15 How does the perpetual inventory method differ from the periodic inventory method?

  Costs of Carrying Inventory  Costs can increase for many reasons including:  obsolescence  deterioration  interest fees  insurance  storage Slide 16 Manage Your Inventory

  Stock shortages can lead to:  loss of sales  loss of customer loyalty  Inventory Turnover Rate  the rate at which inventory is sold and replaced with new inventory Why is this important for you to know? Slide 17 Costs of Being Out of Stock

  Complete the Inventory Management Worksheet  Complete the calculations: - Yearly sales (quantity sold  retail price) - ending inventory value (ending inventory  retail price)  Answer the questions  Mr. Farrar when you both parts are finished. You Task