Inventory Management the Inventory System at Apple Essay

Inventory Management

The Inventory System at Apple

The paper looks at the inventory system utilized by Apple Inc. According to the 10-k Apple account for the inventory using a first in first out (FIFO) system. The stock is fast moving and the efficiency which results in the company only having approximately five days worth of stock on hand at any point in time is facilitated through the use of a perpetual inventory system. This operates in real time. Inventory on hand is also minimized with finished products being shipped directly to customers from the outsource suppliers. There are alternate approaches Apple could have adopted, such as the last in first out (LIFO) entry system. LIFO assumes that the last deliveries into a firm will be the first infantry to leave a firm. The firm could also adopt a periodic inventory system, where stock levels would only be updated periodically, assessing this is often associated with low overheads, but would be a hindrance to Apple who requires accurate up-to-date information in order to manage stock flow.

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Apple Inc., is a highly successful firm.Inventory management is argued to have played an important role in that success by ensuring the goods get to the consumers in the right manner in a highly efficient and cost effective manner (Berka, 2009). To appreciate the inventories system it is necessary to look at the way in which inventory is accounted for, as well as the underlying inventory management systems.

Apple Inc., account for inventory using the first in first out system (FIFO). This is one of the most common methods of inventory valuation, calculated based on the assumption that inventory will all be utilized in date order. As inventories received into the company, it….....