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Epsilon Retail Stores Scenario: Inventory Management Product Beginning Inventory (units) Purchases (units) Sales (units) Ending Inventory (units) Cost per Unit ($) Product X 4,000 2,500

Epsilon Retail Stores

Scenario: Inventory Management

Product

Beginning Inventory (units)

Purchases (units)

Sales (units)

Ending Inventory (units)

Cost per Unit ($)

Product X

4,000

2,500

3,000

3,500

25

Product Y

3,000

2,000

2,200

2,800

30

Requirements:

  1. Inventory Valuation:
    • Calculate the cost of goods sold (COGS) for Product X and Product Y using the weighted average cost method.
  1. Inventory Turnover Ratio:
    • Compute the inventory turnover ratio for both Product X and Product Y and explain its significance in evaluating inventory management efficiency.
  1. Just-in-Time Inventory System:
    • Discuss the advantages and disadvantages of implementing a just-in-time inventory system for Epsilon Retail Stores based on the inventory data provided.
  1. ABC Analysis:
    • Perform an ABC analysis to classify Product X and Product Y based on their annual sales revenue and recommend appropriate inventory management strategies for each category.
  1. Inventory Optimization:
    • Recommend two strategies Epsilon Retail Stores could adopt to optimize its inventory levels and reduce carrying costs based on the inventory turnover ratio analysis.

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