Inventory Management, Simplified Costing, Capital Budgeting And Cost Analysis

Course Contents, Concepts and Issues:

Inventory Management, Just-in-Tiime (JIT) and Simplified Costing Methods

• Inventory Management in Retail Organizations
• Costs Associated with Goods for Sale
• Management of Inventory Costs
• The First Step in Managing Goods for Sale
• Basic EOQ Assumptions
• EOQ Formula
• Ordering and Carrying Costs Illustrated
• Ordering Points
• Ordering Points Illustrated
• Inventory Management and Safety Stock
• Safety Stock Computation Illustration
• Estimating Inventory-Related Relevant Costs
• Carrying Costs
• Opportunity Costs
• Cost of a Prediction Error
• Just-in-Time Purchasing
• Relevant Costs in JIT Purchasing
• Relationship between Carrying and Ordering Costs Illustrated
• Analysis of Alternative Purchasing Policies Illustrated
• JIT Purchasing and Supply-Chain Analysis
• Supplier Evaluation Illustrated
• Inventory Management and Materials Requirements Planning
• MRP Information Inputs
• Inventory Management and JIT Production
• JIT Production Goals
• JIT Production Features
• Other Benefits of JIT Production
• JIT and Enterprise Resource Planning Systems (ERP)
• Performance Measures and Control in JIT
• Backflush Costing
• Special Considerations in Backflush Costing
• Sample Journal Entries in Backflush Costing
• Sample General Ledger Flows in Backflush Costing
• Lean Accounting

Capital Budgeting and Cost Analysis

• Two Dimension of Cost Analysis
• Project and Time Dimensions of Capital Budgeting Illustrated
• Capital Budgeting
• Five Stages in Capital Budgeting
• Four Capital Budgeting Methods
• Discounted Cash Flows
• Net Present Value (NPV) Method
• Three-Step NPV Method
• NPV Method Illustrated
• Internal Rate of Return (IRR) Method
• IRR Method Illustrated
• NPV vs. IRR Methods
• Sensitivity Analysis Illustration
• Payback Method
• Accrual Accounting Rate of Return Method (AARR)
• AARR Method Formula
• Evaluating Managers and Goal-Congruence Issues
• Relevant Cash Flows in DCF Analysis
• Net Initial Investment
• Cash Flow from Operations
• Terminal Disposal of Investment
• Cash Flow Effects from Investment Decisions, Illustrated
• Managing the Project
• Strategic Considerations in Capital Budgeting