Write a brief analysis of the three inventory policies depicted in the budget scenarios A, B and C and recommend a policy that the company should implement. Give reasons for your recommendation. Your write-up should be based on the results you obtained from the analyses in steps 1-5 above for each of the scenarios A, B, and C. Assume that you are writing on behalf of a professional consultant advising the President of the company about the companys inventory policies.

Your write-up should be in the form of a one-page Memo to the President of the company. Organization, grammar, and spelling are important.

SCENARIO A) (50% Ending Inventory)

2A		JH Market
		Purchases Budget
Ending Inventory: 50%		For the Quarter Ended December 31, 2020
	January	February	March	Total for Quarter
Cost of Goods Sold	$ 350,000	$ 1,050,000	$ 1,400,000	$ 2,800,000
End of Month Inventory (50%)	$ 525,000	$ 700,000	$ 875,000	$ 2,100,000
Beginning of Month Inventory	175,000	525,000	700,000	$ 1,400,000
Purchase During the Month	$ 700,000	$ 1,225,000	$ 1,575,000	$ 3,500,000
Payment for Purchase	1,225,000	$ 700,000	$ 1,225,000

SCENARIO B) (90% Ending Inventory)

2A		JH Market
		Purchases Budget
Ending Inventory: 90%		For the Year Ended December 31, 2020
	January	February	March	Total for Quarter
Cost of Goods Sold	$ 350,000	$ 1,050,000	$ 1,400,000	$ 2,800,000
End of Month Inventory (90%)	$ 945,000	$ 1,260,000	$ 1,575,000	$ 3,780,000
Beginning of Month Inventory	315,000	945,000	1,260,000	$ 2,520,000
Purchase During the Month	$ 980,000	$ 1,365,000	$ 1,715,000	$ 4,060,000
Payment for Purchase	525,000	$ 980,000	$ 1,365,000

SCENARIO C) (10% Ending Inventory)

2A		JH Market
		Purchases Budget
Ending Inventory: 10%		For the Year Ended December 31, 2020
	January	February	March	Total for Quarter
Cost of Goods Sold	$ 350,000	$ 1,050,000	$ 1,400,000	$ 2,800,000
End of Month Inventory (10%)	$ 105,000	$ 140,000	$ 175,000	$ 420,000
Beginning of Month Inventory	35,000	105,000	140,000	$ 280,000
Purchase During the Month	$ 420,000	$ 1,085,000	$ 1,435,000	$ 2,940,000
Payment for Purchase	1,925,000	$ 420,000	$ 1,085,000