Answer the following question based on the information presented for Cloud 9 in Appendix A of this book and in the current and earlier chapters. You should also consider your answers to the case study questions in earlier chapters.

While Cloud 9 maintains a perpetual inventory system, a full inventory count was done at year end.

Weijing Fei, a junior W&S staff member, attended and observed the count. She subsequently prepared the following memo to file. Sharon is quite busy and she has asked you to critique the memo on her behalf.

Memo to File re: Inventory Test Count By: Weijing Fei On December 31, 2023, I attended the inventory count at the Cloud 9 Ltd. warehouse located in Richmond, B.C. A perpetual inventory system is maintained and warehouse staff perform physical counts of the running shoes on a weekly basis. The warehouse was closed to ensure the count would not be affected by incoming or outgoing orders.

The count was supervised by Carla Johnson and the warehouse manager. Count teams consisted of two employees. One person counted, while the other recorded the item. Count sheets were sequential.

Each count team was provided with plain paper for items that may not have been listed on the count sheets. The inventory was arranged neatly and orderly, with all footwear stacked on shelves by type. The shelves are normally stacked five boxes high by shoe type. Count tags were used and the warehouse is organized. If there were too many shoes of the same type to fit on one shelf, then the excess was stacked on the shelf above, next to it, or in another marked shelf where room was available. Therefore, some shelves had more than one type of running shoe on them as a result of this. If shoes of the same kind were located on other shelves, then a tag was added to the shelf indicating where the rest could be located and how many were stacked there.

All footwear boxes were marked with labels that described the shoe style and type (model, size) and all of the shoes were arranged such that these labels were facing outward and could therefore be read by the counters.

Sample:

Chose a sample of 20 items for testing, 10 floor to sheet and 10 sheet to floor.

Results:

No errors were detected in the sample of inventory that was chosen.

Conclusion:

The year-end inventory listing has been adjusted to actual per-count results and can be relied upon.

Required Critique the memo to file prepared by Weijing. Note both good and bad points.