Problem 1:
Describe the need for safety stock
- Demand fluctuation, delay in receipt of inventory, impact of slow delivery
- Advantages of safety stock
Problem 2:
Describe the various methods of disposing the obsolete stock
• Review inventory for obsolete items
• Create a Materials Review Board (MRB)
• Include an obsolescence review in the closing procedure
• Use computer tracking for items with a short shelf life
• Track the rework status actively
Problem 2:
Describe the several financial ratios important in financial statement analysis.
• Liquidity ratio
• Profitability ratio
• Leverage ratio
• Activity ratio