Effective Inventory Management: Classes, Critical Factors, and Costs
Item-16 Inventory Management Concept
Inventory is a collection of items accumulated or stored, pending subsequent use or claim.
Main Function
To balance the flow of production and the flow of demand across different timeframes. Inventories (raw materials, work in progress, etc.) represent around 20% of the total assets of Spanish companies. Therefore, inventories are critical assets impacting profitability, liquidity, and business taxation.
Inventory-related decisions are crucial for coordinating production,
Read MoreCost Accounting for Specific Orders and Processes
Cost Accounting System for Specific Orders
This system is used by businesses that produce goods on a per-order basis, allowing for the separation of production into distinct batches. Upon receiving an order, a production order is issued, detailing customer requirements such as item type, quantity, customer name, designs, and specifications.
Registration and Monitoring of Direct Materials
This process tracks the direct materials from the initial request to the supplier through their use in production.
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Primary Sources
Internal primary sources gather information from company data, while external sources utilize data from the business environment. Quantitative methods offer structured, statistically representative results. Qualitative techniques, conversely, don’t employ statistical treatment for population representation but provide richer descriptive data. Quantitative techniques use numbers for classification, correlation, and comparison, yielding objective, accurate, and reliable information.
Read MoreFinancial Statement Analysis & Key Formulas
Financial Statement Analysis
Key Statements
Income Statement: List all revenues and expenses (cost of goods sold included).
Balance Sheet: List all assets (in order of liquidity). List all liabilities (in order of liquidity) and Stockholders’ Equity (SHE) (preferred stock, common stock, additional paid-in capital, retained earnings, treasury stock).
Statement of Cash Flows: Cash flow from operating activities (cash received, accounts receivable/payable, cash paid, income/salaries). Cash flow from investing
Read MoreStatistics and Statistical Inference Key Concepts
Statistics and Statistical Inference
Basic Concepts
Population: The complete set of data for a statistical study.
Sample: A subset of the population. The methods used to select samples are called sampling.
Random Sample: Elements chosen with equal opportunity for selection.
Non-Random Sample: Elements selected based on specific criteria defined by the researcher.
Table of Random Numbers: A set of digits generated by a computer.
Branches of Statistics
- Descriptive Statistics: Presents, represents, and summarizes
Introduction to Statistical Concepts and Methods
Statistics
Statistics is commonly regarded as a collection of numerical facts expressed in terms of a submissive relationship, derived from other numerical data.
Kendall and Buckland define statistics as a summary value calculated from a sample of observations, often used to estimate a population parameter.
Gini (1953) states: “Statistics is a specialized technique suitable for the quantitative study of mass or collective phenomena, requiring a mass of observations of simpler individual phenomena.”
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