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Accounting - 123 just in time method, Study notes of Accounting

1) JUST IN TIME ANALYSIS. 2) PERIODIC STOCK TAKING SYSTEM. 3) INVENTORY TURN TAKING SYSTEM.

Typology: Study notes

2010/2011

Uploaded on 09/01/2011

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PRESENTATION ON :
1) JUST IN TIME ANALYSIS.
2) PERIODIC STOCK TAKING SYSTEM.
3) INVENTORY TURN TAKING
SYSTEM
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PRESENTATION ON :

1) JUST IN TIME ANALYSIS.

2) PERIODIC STOCK TAKING SYSTEM.

3) INVENTORY TURN TAKING

SYSTEM

1) JUST IN TIME ANALYSIS.

2) PERIODIC STOCK TAKING SYSTEM.

3) INVENTORY TURN TAKING SYSTEM

HISTORY

• FIRST USED BY FORD MOTERS COMPANY BY

HENRY FORD.

• TOYOTA MOTOR CORPORATION JAPAN.

PHILOSOPHY

  • (^) TRANSACTION COST APPROACH. IT REDUCES INVENTORY IN A FIRM.
  • (^) PRICE VOLATILATY. ASSUMES A LEVEL OFINPUT PRICE STABILITY THAT OBVIATES THE NEED TO BUY PART IN ADVANCE OF PRICE RISES.
  • (^) QUALITY VOLATILATY. ASSUMES QUALITY THAT INPUT PART QUALITY REMAINHS CONSTANT OVER TIME.
  • (^) DEMAND STABILITY. IT HELPS IN ENSURING EFFICIENT CAPITAL UTILIZING RATES.

BUSINESS MODELS

  • (^) VENDOR MANAGED INVENTORY
  • (^) CUSTOMER MANAGED INVENTORY

PERIODIC STOCK TAKING SYSTEM

  • (^) Under this method the value of stock is ascertained

by physical counting of the stock at the end of a

particular period, usually once in a year. It is a simple

and economical method of stock taking and can be

adopted by small concerns.

Inventory turns

  • (^) In business management, inventory turns often referred to as stockturn , stock turns , turns , and stock turnover.
  • (^) This measures the number of times invested in goods to be sold or used over in a year.

The Concept of Inventory Turnover Annual Cost of Goods Sold (Rs) Inventory Investment(Rs) Annual Inventory Turns 10,000 10,000 1 10,000 5,000 2 10,000 2,500 4

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