Name ______Class______Date ______

inventory management

Directions:The owner of Elizabeth’s Kitchen Warehouse has asked you to help evaluate her end-of-year inventory. Below is a list of the items in her inventory along with the price for each. Calculate the yearly sales and the ending value of her inventory based on the number of items left at the end of the year. Then answer the questions that follow to help Elizabeth evaluate her inventory needs.

Description / Beginning Inventory, January 1 / Ending Inventory, December 30 / Quantity Sold / Retail Price / Yearly Sales / Ending Inventory Value
Slow cooker / 6 / 4 / 2 / $150.00
Bamboo pot rack, rectangular / 2 / 2 / 0 / 330.00
Griddle with backsplash / 4 / 2 / 2 / 149.00
Gourmet cutting board w/groove / 25 / 5 / 20 / 69.99
Peppermill / 30 / 10 / 20 / 14.99
Salt mill / 30 / 10 / 20 / 14.99
Microplane coarse grater / 14 / 6 / 8 / 14.99
Stainless steel measuring spoons / 35 / 15 / 20 / 11.50
Salad spinner / 4 / 3 / 1 / 59.95
Stainless steel garlic press / 12 / 4 / 8 / 39.95
Spatula set / 21 / 6 / 15 / 12.95
Ice cream scoop / 40 / 10 / 30 / 19.95
Pizza wheel / 40 / 15 / 25 / 9.95
Stainless steel mixing bowls / 5 / 4 / 1 / 99.99
Two-cup coffee maker / 19 / 4 / 15 / 29.99
Popcorn popper, 10 cup / 21 / 6 / 15 / 49.99
Toaster / 24 / 4 / 20 / 39.95
Microwave oven / 5 / 1 / 4 / 149.95
Portable electric burner / 16 / 4 / 12 / 49.95
3-piece knife set / 21 / 6 / 15 / 29.95
Ice cube tray set / 38 / 8 / 30 / 9.95
TOTALS

(continued)

  1. Based on your calculations, which product had the highest sales?

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  1. Based on your calculations, which product had the lowest sales?

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  1. Are there any products you think Elizabeth should discontinue selling? If so, list them below and explain why.

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4. Based on the ending inventory and the number of items sold last year, which products do you think Elizabeth should reorder for the upcoming year? List them below.

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5. Explain why it is important for Elizabeth to manage her inventory. What risks does Elizabeth face if she carries too much inventory or too little inventory?

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6. What recommendations would you make to help Elizabethdecrease her carrying costs and reduce the chances of running out of stock?

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Name ______Class______Date ______

CASH BUDGET

Directions:Each spring your school store puts together supply kits for the neighboring elementary school for the upcoming school year. The kits include a box of 64 crayons, a 500-sheet pack of notebook paper, six #2 pencils, a 12-inch ruler, an 8-ounce bottle of glue, a school folder, and a school T-shirt. Recently a new office supply store has opened in your community. Itwill be offering the same items you do, except for the school folder and T-shirt, at about half the cost of your supplies. This year you sold 350 kits. You sold the kits for 20 percent over the cost of all items.

Use the chart below or an electronic spreadsheet to forecast a cash budget for next year’s sale. Expect at least a 50 percent decrease in sales. Perform the research needed to obtain the best price for the items that you put in the kits. Use these prices to calculate the cash receipts and disbursements for the current year. Then complete the other calculations in the table. Based on your projections, write a report suggesting ways to increase your cash flow despite the decrease in sales.

Projected cash receipts / Current Year / Projection for Next Year / Difference / Percent Change
Cash sales
Projected cash disbursements
Crayons
Notebook paper
# 2 pencils
12-inch ruler
Glue
School folder
T-shirt
Total cash disbursements
Net cash increase/decrease

Name ______Class______Date ______

MANAGEMENT PROBLEM SOLVING

Directions:Managers must make decisions in all areas of business operation. With a partner, read the scenarios below. Then, work together to prepare a report containing recommendations to help the business owner with the decision-making process.

Scenario 1

Katrina owns a specialized cosmetic and skin care store that is affiliated with a national brand of cosmetics. She has always offeredhair care and accessory items to her customers in addition to the cosmetic products.

Recently she received a letter from the corporate office of the cosmetics chain informing her that she could not continue operating as a “Platinum Level” store if she continued to sell the hair care and accessory items. The letter explained that the sale of items other than those manufactured by the cosmetic and skin care companyis a violation of the “Platinum Level” guidelines. As the owner of a “Platinum Level” store, Katrinahas access to new product lines before other stores and is given a supply of one “Platinum Level” gift item each season to give to her customers as a sales incentive.

Katrina is not sure whether the value of being a “Platinum Level” store is worth the revenue that she would lose by not offering the hair care and accessory items for sale. How would you advise Katrina to make this decision?

Scenario 2

Katrina is currently examining her location options for her business. Right now, her store is located in a medium-sized metropolitan area. She rents space located in a strip mall across the street from a shopping mall that has a Macy’s, Dillard’s, and JCPenney’s. Walmart recently expanded as a supercenter store and relocated three miles away from Katrina’s store.The old Walmart location, which was also near Katrina’s store, is empty, and there are no immediate plans for any other business to move into the space. There is a new strip mall being planned just across the street from the new Walmart location with available space. The builder has offered Katrina a reduced price along with custom modifications at no cost if she will lease a space in the center. A coffee shop has leased space on the corner of the planned strip mall. Other businesses that have leased space include a nail salon, a shop that specializes in gift baskets and food specialty items, and a clothing boutique. What advice would you give Katrina to help her decide on the best location for her business?