*Working on a Discussion post for Intro to Management. Would like any corrections or help with question 4. Thank you!

Jason Archer is the CEO of JCPenney (a United States retailer). Because Jason's bonus is based on the company's earnings, he has directed the controller to use FIFO as the inventory costing method. Jason did not tell the controller his real reason for the directive; instead, he stated that he thought FIFO better reflected the actual flow of inventory costs. Please review the following links and company websites then answer the questions.

• The University Record Online: University of Michigan
• JCPenney
• Macy's

1.Jason's decision to select FIFO appropriate? Is it ethical? Is Jason wrong if this will help the company and also benefit him too?

2.What are some of the pitfalls of a company basing a manager's or CEO's compensation on the company's earnings?

3.Using the links provided for JCPenney and Macys (a United States retailer); determine the inventory turnover ratio for the companies. What does this ratio tell you about these companies? How do the companies compare?

4.Using the links provided for JCPenney and Macys, calculate the number of days in inventory for the companies. What does this ratio tell you about these companies? How do the companies compare?

1.) Jason's use of the FIFO method (to me) is not ethical. Jason was given information that solely benefit him. As a result, this has a negative impact to the company as a whole. A business cannot run efficiency without the proper research done. Using that research, a proper decision can be made.

2.) The largest pitfall of a company paying their employees this way is the tendency for employees to want to make the most money. With such a mindset, the focus of greed is what may not be good for the business.

3.) After comparing JC Penny and Macys; I found that JC Penny and Macys are still operating during the covid pandemic. Yet, both companies have had a significant loss of 2-7% percent loss in sales growth.