What Is an Inventory Control System? Discuss the Objective of Inventory

question 25

Essay

What is an inventory control system? Discuss the objective of inventory management and describe materials requirement planning (MRP)and distribution resource planning (DRP).

Comprehend and apply the return on investment (ROI) formula to evaluate company performance.

Calculate and interpret turnover as it relates to company investments and operations.

Understand the concept of net operating income and its role in assessing company performance.

Comprehend and apply the concept of residual income for performance evaluation.

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Definitions:

Sales Price

The final amount of money charged for a product or service, or the value that consumers are willing to pay.

Optimal Point

The most favorable position or condition that yields the maximum benefit or efficiency in a given situation, such as in investment or production.

Credit Policy

Rules a business adheres to for assessing a customer's eligibility for credit and the stipulations under which it is offered.

Opportunity Cost

The most valuable alternative that is given up if a particular investment is undertaken.