Accounting Best Practices, Fifth Edition

18–11 Inventory Policies for Best Practices (Chapter 16)

• A materials review board shall conduct an ongoing review of the inventory to ascertain which items should be disposed of, and to direct this disposition in the most profitable manner.

• The company will reject all received items for which no prior authorization was issued.

• All inventory transactions shall be recorded in the warehouse management system database within ___ minutes of their occurrence.

• The management team shall regularly review the company’s products, product options, and supporting parts structure to cancel unprofitable items and eliminate redundancy.

• The management team shall endeavor to reduce the company’s inventory investment to the minimum level, subject to constraints imposed by profitability, warranty, and customer service objectives.