Melvin's Company manufactures a fitness device that is worn like a watch and tracks health activities including steps taken, stairs climbed, heart rate and calories burned. Melvin is great at understanding the technical side of the business but needs help with the accounting issues. At any given time, Melvin may have 500 different units being built. the three "phases" of inventory Melvin should be keeping track of and 2 reasons (for each "phase") it is important for Melvin to keep records of this activity. Additional information relevant to this problem:

a. Melvin has 14 employees that work over 2 shifts. Melvin usually covers one shift each day.

b. Some of the materials used in making these devices are quite expensive, are very small and are easily re-saleable.

c. Melvin's business orders tend to come in uneven orders. He makes the products year round but may go a month or more with no sales followed by a large order.