RSM219H1 Chapter Notes - Chapter 7: Book Value, Write-Off, Combined Gas And Steam
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RSM219H1 Full Course Notes
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Inventory is any item purchased by a company for resale to customers or to be used in the manufacture of a product that is then sold to customers. Merchandisers or retailers: purchase their inventory from other places with the objective of selling it to customers at a profit. Often the most significant asset for retailers and manufacturers because it"s the largest asset that will be converted to cash over the next year. Sell inventory at a higher price than the company purchased it for. The company needs to select suppliers: companies that can provide the required items on a timely basis. Must decide how much inventory it wants to purchase from the supplier. Needs to estimate how much product they think their customers will buy and also consider the price charged by the supplier. Don"t want to have too much inventory on hand because it costs money to store inventory.
