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Sep 27, 2010


                                                                                                    ADVISOR:-ANTENEH GORFU

                                   JIMMA UNIVERSITY
                                          DEPARTMENT OF ACCOUNTING
                                                                                                                         JANUARY, 2013
                                                                                                                       JIMMA, ETHIOPIA

                                        Table of Contents  
               Contents                                                                                                        Pages                                                                                                
              CHAPTER ONE
                  CHAPTER TWO

                    CHAPTER THREE
3.4            Sample, Sample Size And Sampling  Technique ................ 19


First and for most I would like to thank my almighty God who provides me all the merit and good things. Secondly, I would like to thank my advisor Ato Anteneh Gorfu who has sacrificed his time to review my work and give me a constructive comments and advices. Also I would like to express my deepest gratitude to Jimma University College of business and economics for the preparation of research for the graduation. Last but not least, I would like express my heart full thanks my secretary Umalina who has carefully typed, designed and edited the research proposal.


The study was conducted by the topic of Inventory control and valuation system of Adama Brothers flour and biscuit factory company. The purpose of this study is to access the inventory and valuation system of the company during the full operation process of its work. Moreover, the study identified problem related to under stock and also examine the valuation system of organization. For primary data collection the researcher would used both structured interview and observation. After the relevant data should collect the data which are qualitative in nature are analyzed and finally the analyzed data brought the researcher to interpretation and recommendations.


                                                              CHAPTER ONE
1.1           Background Of The Study
Inventory is considered as a current asset because accompany sells it within a year or within its operating cycle inventory for merchandise company so it is obvious that inventory is a largest assets of the company’s current asset: they have significant effect on the financial statement subtotal and rations used in evaluating the liquidity and profitability of business (William m. 2006, p/350).   All business no matter of their size would establish effective control procedures these procedure are designed to protect resource and financial records as they limit the temptation to miss use assets (Brock, 2003 p, 650).
Market price or replacement cost is the price of the business would have to pay an item of inventory though channels in usual quantity to determine market price, business contacts their supplier read trade publication or review recent purchase the business uses the lower of cost market value (Brock 20003, p 617).
There the three thing stored in mind concerning inventory: fist, one company’s raw material can be another’s finished goods second, various types of inventory can be quite different in terms of liquidity which depend  on nature of the product. Finally the important distinction between finished goods and other types of inventories is that the demand for an inventory item that becomes a part of another item usually derived demand (grow. H, 1998, p618).
All business transition could record columnar fashion as in crease or decrease to element of accounting equation. However, even for every small company with few transaction it would become most companies use a process called double entry system.(Thomas 2005,p, 64).

1.2           Back ground of the organization  
Brother biscuit and Flour Company is established in the 1993e.c head office of company is found in Adama which is the major commercial city of regional state of oromia. Adama is located some 100 km far away from Addis Ababa capital city of Ethiopia. Adama who is located inside the Great Rift Valley and this cause the city to have of weather condition a lot.
When the company established in the 1993e.c   the first flour milling machine was installed around Rob Gebeya in kebele 13, Rob Gebeya attains its name because of the cattle market day which takes place every Wednesday.
The present head office of the company is also in the very same compound where the factory is installed. The total are of the land the company own when it is established in 1993e.c is 700 meter square. At the time capital of the company is 8.671,6605 offices and to establish a store using a20 feet shipping container.  The remaining four fifth of the area was used for the installation of the factory. And out of that the majorities are consumed by production building and raw material store.
The major reasons for the investors to choose Adama for establishing the company are: the residence office investor is at Adam this gives the following advantages.
·       Easy visit and run the organization and adequate information about the area.
·       Positive psychological effects on investors (i.e. satisfying need for security) etc.
·       Weariness to raw material- the major what producing areas in Ethiopia which is used as raw material for factor are Arsi and bale. The transportation of wheat from these areas to other industrial area (Addis Ababa, bishoftu, dukem etc) usually pass through Adam and merchants usually sell it in the Adam city first.
The current internal situation is well described by explaining the vision, mission and value of brother’s flour and biscuit factory.          I, Vision: - is the intension which expresses what organization needs to be in the future such as:
Ö   The company wants to be leader in sector by achieving its efficiency and improve quality.
 Ö The company wants to utilize the best technology when ever technological shift   happens in the industry.
Ö The company wants to sell its product in the foreign market by achieving the derived quality and adequate production

II, Mission: - refers to the purpose for the existence of the organization and express what        
                       Company provide to general society such as:
Ö  Providing a better quality products by and service to the society
Ö Keeping safety of the environments by operating in an environmental friendly ways.
Ö  Providing job opportunity for the society.
Ö Eliminating the importation of flour, soft biscuits, hard biscuits and cream biscuits to save foreign exchange
III, value: - brother’s flour and biscuit factory have the following value
                    Ö Good relationship between management and employee
                   Ö  Motivating the employee to strive for achieving their goals.
              Ö   Respecting the law and safe guarding the environment.
                 Ö Maintaining Avery favorable good will among the customers.


                       1.3 Statement of the problem
Inventory is defined as a manufacturing companying goods owned by business and held either for use in manufacturing as raw material inputs and product waiting for sale or output. Hence it is the fact that in any large enterprise inventory control plays a great role to maximize profitability and make positive impact on enterprise’s operation (Stanley elf. 1996/186).
Inventor control and valuation system objective and policies should be consistent with every organization. Even though inventory covers large portion of current asset of an organization it needs unique effective evaluation continuously. The absence of proper inventory control and evaluation system result in a problem like, inventory deterioration, wastage, damages etc.( Weygand etc. 1999).
The research has conducted to solve the problem related to inventory control and evaluation system of Adam brother flour and biscuit factory which produce different kind and size of biscuit and quality flour and supplied to its customers using different inventory control and evaluation system currently.
So the main aim of the research will attempt to answerer the following basic research question related to inventory control and evaluation system of brother flour and biscuit factory.
1)   Is the company following the inventory management system and models while controlling its inventory?
2)   How should the company control the loss result with obsolescence deterioration and damages of inventory?
3)   What is the impact of inventory control and valuation system on annual sale and production with budgeted amount?
4)   How do the company handling the stock and control the inventory items?

1.4 Objective of the study
Different studies have been conducted to achieve certain objective. So the researcher had conduct the proposal to meet both general and specific objective
1.4.1 General objective
The general objective of the study is to assess the inventory control system and to identify areas where problem accrued in relation to inventory control and valuation system of brother biscuit and flour factory.
1.4.1 Specific objective
In order achieve the general objective the study was considered the following specific objective.
 Ö  To investigate whether the current inventory control and evolution system of the company would support the operation efficiently.
Ö  To assess whether the companies seriously follow the inventory control and evolution   
     system while controlling its inventory.
Ö To indicate the company’s potential in improving inventory control and valuation system
Ö To evaluate inventory cost in order to reduce cost of production and overall cost of organization
Ö   To give conclusion and recommendation based on the findings.

1.5 Significance of the study
The study made an analysis to determine if brother flour and biscuit factory has an effective inventory control and valuation system. The study is expected to inform decision makers the potential problems in relation to inventory control and valuation system and helps to understand the awareness of employees and head of inventory control department toward inventory control and valuation method. Therefore the study would be set out the mechanism to understand and implement to inventory control and valuation method before enter in to problem associated inventory valuation.
1.6 Scope of the study
Due to the problem of cost and time limitation the study was under taken on the brother’s flour and biscuit factory’s inventory control and valuation system. The problem had been investigated using primary data by structured in person interview from management department and employees of the factory and direct observation
1.7 Limitation of the study.
It is useful enough to clearly express that this research had be conducted under some constraints.
*   Financial constraints to conduct the research paper.
*   Shortage of the time to conduct the research.
*    No willingness of the organization gives necessary information within time.
*   Inadequate source of information from the organization.
1.8 Organization of the paper.
The research paper consist five chapters. The first chapter deals with introduction of the study. The second chapter will focus on literature review. The third chapter deals with research methodologies .The fourth and last chapters consist of data analysis &interpretation and conclusion &recommendation respectively.

2.1 An overview of inventory control and valuation system.                                         Inventory is considered as a current because accompany sell it within a year or within its operating cycle inventory for merchandise company: all goods owed and hand for sale irregular course of business. Inventory is defined as manufacturing company good owned by business and held either for use in the manufacturing as raw material or inputs and product waiting for sale or out puts.
In the manufacturing company there are three types of inventory. These are:-
a)    Raw material (good used in manufacturing as in puts)
b)   Working in process (they are partially completed products)
c)    Finished goods( are goods ready for sale )
2.1.1 Types of inventory
A)  Merchandise inventory
It represents goods on hand purchased for resale by are tail or trading company such as an importer or exporter of resale. Generally the purchasing company does not physically alter good acquired; the goods are in finished from when they leave the manufacture plant.
B) Manufacturing inventory
They are all goods used during the process of production training from inputs to finished goods there are several categories of merchandise inventory.
I.                  Raw material inventory :- they are tangible goods purchased or obtained in different ways and used for direct use of manufacturing of goods for resale parts or subassemblies manufactured before use are sometimes classified as component part of inventory
II.               Work in process inventory: - are goods requiring further processing before completion or sale: they include cost of direct material direct labor and allocated                                                  manufacturing incurred to date.
III.           Finished goods inventory: - they are manufactured items completed and held for sale.
IV.           Manufacturing supplies inventorying: - they are inventories used for keeping the safety of machinery and different material e.g. lubrications oils for the machinery, cleaning material and items that make up a significant part of finished product.
C. Miscellaneous inventory
It includes items such as office material and shipping supplies. Inventory invitatory of this are typically used in the near future and are usually recorded as selling or general expense when purchased. (Intermediate accounting II edition year 2000)
2.2 The needs for supplies of inventory
The existence of Inventories is successive stages of the production process serves as a number of important purposes.  A few of which are defined bellows.
2.2.1 Pipeline (for transits inventories)
When the product is geographically removed from suppliers and customers it makes time to supply the amount at the different point of the production distribution network. So to satisfy demand without disruption it is necessary to hold extra stock at various point to handle demand while replenished are in transit from proceeding stage. These quantities are known as pipelines or transit inventories.
2.2.2 Economic order quantities (EOQ)
It is the inventory optimal level that should be ordered. It is point where the carrying cost and ordering cost are equal. Since inventory is used to cover actual demand there is need for replenishment. It is important to decide on how much to order at a time. It is desirable to order in quantities that will balance the cost of holding too much stock against that of ordering in small quantities too frequently.

2.2.3 Safety (buffer stock)
In the real world, there may be random departure from what management expects in the level of demand, production rates, the replenish men time or other factors. To protect the company against such reasonable but nevertheless random, i.e. un controllable occurrence it is necessary to maintain additional inventory beyond what is needed for normally requirement such an extra quantities are known as safety or buffer stock because they provide buffer or safety margins against unprediction situation  of the external environment. (T.K ) Sharman ,operation mgmt 733-789)
Safety stocks are extra inventories that can be maintained to cover unexpected shortage of inventory and they are determined by opportunity cost and carrying cost of inventory.
2.2.4 Determination of stock level
Stock level is the level of stock the company expects to be maintaining any time. They may be classified no level and minimum level and danger level. Danger level is stock level below minimum level of stock (financial management -2)
2.3 The function of inventory
Regardless of from (raw materials, working process and finished goods) all inventories may be further describes performing one or more of transit, cycle buffer, seasonal and decoupling function.
2.3.1 Transit inventory:-
These are primary pipelines inventories, their existence arising because of the need to transport inventory from point.
2.3.2 Cycle inventories: - these exist because of management attempt to reduce in lot size. In order to facilitate such a plan inventories accumulated at points in the system
2.3.3 Buffer inventories: - this arises mainly from decision regarding risk. The higher the service level, the greater the quantities in the buffer inventories required.
2.3.4 Anticipation of inventory: - it exit because of expected changes demand supplies and price of the inventory. If supply shortages are expected to size inventories may be acquired in anticipation of its development price expected. A simple demand example would be a seasonal expectation for high requirement such as heating oil in the winter time.
2.3.5 Decoupling inventories: - provide the function of separating dependent centre. The independent operation of this center may be achieved a limited period of time by use of decoupling inventories (fees and warn/principle of accounting 16th edition).

2.4 Inventory decision
The primary objective of inventory accounting is to determine income properly by matching cost of the period against revenue for the period. In accounting for inventory control and valuation management must choose among different processing system, costing system and valuation methods.
This indicates as how to record the inventory. Inventory systems i.e. there are two principal inventory systems. These are periodic and perpetual
2.4.1 Periodic inventory system
When periodic inventory system is used only the revenue from sale is recorded each time a sale is made. No entry is made at a time of sale to record the cost of merchandise that has been sold under period inventory system purchase and purchase related activities are separately maintained. Under this system the ending inventory and cost of goods sold amount are determined only at the end of the period though physical or actual counting.  Therefore under periodic system inventory not on a hand are considered as sold or cost of goods sold consequently a physical inventory must be take a complete physical inventory in order to determine cost of inventory.  The periodic inventory system is used by retail enterprise that sells many kinds of low cost unit’s product such as groceries, hard ware and drugs.
2.4.2 Perpetual inventory system
This system continuously up dated for all purchase and sale of inventory. Perpetual inventory system uses accounting records that continuously disclose the amount of inventories. A separate account for each type of merchandise is maintained in subsidiary ledger. The firm selling a relatively small number of high unit cost items such as, office equipment automobiles or garment is more likely use perpetual inventory account system (William, 2006 p/110).
2.5. Inventory cost flow assumption
An appropriate cost allocation procedure must be selected to allocate the total cost of goods available for sale during each period between the cost of goods sold and cost of ending inventory. The physical movement of good is nearly always on the first out (FIFO) basis especially if the product is perishable or subject to obsolescence.
Inventory accounting concerned the flow cost through the accounting system not the flow of goods physically in and out of as stock room. The inventory cost flow methods conform to the cost principle the central issue is the order in which the actual unit costs incurred are assigned to the ending inventory and the cost of goods sold. Select of an inventory cost and cost flow method determine the cost of goods sold which is the deducted from sales revenue for the period. There are four inventory cost flow methods.
2.5.1 Specific cost identification method 
This method requires that each item stocked be specifically method so that its unit cost can be identified at any time. when the items involves is large or expensive or only small quantities are handled, it may be feasible to tag or number each item when purchased or manufactured.
This method assigns their actual purchase price (cost to items remaining on hand) and items sold (cost of goods sold) during the period. This method would be used only if the date of sale and specific unit cost each item sold and each item remaining on hand are known.
2.5.2 Average cost method
This method assumes the cost of inventory on hand at the end of a period and cost of goods sold during the period are representative of all cost incurred during a period. During the period inventory system the weighted average unit cost is used for the entire accounting period. However during the perpetual inventory system the moving average unit cost is used.
2.5.3 First in first out (FIFO) method
This method treats the first good purchased or manufactured as the first unit cost out on sale or issuance. Good sold or issued are valued at the oldest unit cost and the goods remaining in inventory are valued at the most recent unit cost amount. FIFO can be used with earlier of the two inventory system during the FIFO methods cost of goods sold consist of the old item purchased.

2.5.4 Last in first out method (LIFO)
It a method of inventory costing that matches inventory valued at the most recent unit acquisition with the current sale revenue. This implies that the items purchased recently are sold first. The unit remaining in ending inventory are cost at oldest unit cost incurred the exact opposite of the FIFO cost assumption
Generally above all inventory cost flows have their own advantage and disadvantages. For example during in flatiron first in first out methods valued inventory approximate more closely to current cost and inventory valuation is overstated. But during the FIFO inventories are valued seriously distorted and Inventory balance are under stated during infatuation the LIFO methods have cost advantages (Charles. Thorn green 10ed).
2.6 valuation of inventory at other that cost  
As discussed in the preceding section cost is primary bases is for the valuation of inventory   under certain circumstance however inventor is valued at other than cost such circumstance arise when its cost of replacing items in inventory is below recorded cost, and inventory it’s no sale able  at normal sale because of imperfection however style chance at other cause.
2.6.1 Valuation of inventory at lower cost or market
If the market value of inventory drops below its cost the company may use mechanism called    lower cost or market. The company may use of inventory drops market. It s methods sometimes called conservatism method of inventory valuation system. It should be noted that regardless of the method (cost or lower cost) it is first necessary to determine the cost of the inventory. Market, as used in the phrase lower of cost market, interprateted to mean the cost to replace the merchandise on the inventory date, based on qualitative typically purchase from the usual source of supply.

                             2.7 Controlling inventories

This is a scientific method of store keeping may considerably bring down the acquisition and retention cost of materials. The store keeping function which involves, receiving sorting, storage up keep and the issue of material entail supervision, checking and proper accounting. This in short is it at physical aspect or maintenance aspects of material. In the expect of inventory management therefore inventory carrying cost is one important elements such as rent insurance lighting taxes etc. The other procurement and buying cost include the cost of calling quotation processing trends, placing supply order receiving and inspection cost as well as the cost may be calculated by analysis of records from purchasing material, planning, receiving their actual measurement will have to be done by proper systems of accounting and statistics. In short it will mean the summation of all cost and expenses incurred in connection with the number of purchase orders. It may be stressed here that right purchase quantity of an item must possess two basic characteristics. It must avoid occasional stock out, It should ensure that overall cost of acquisition and possession minimum while holding the optimum inventory of an item. Assume no idle time and stock out have to be accounted for we can set out to determine the economic order quantity of an items. (T.K sharm a- 2008).

2.7.1. Inventory control system
I.             The two bin system – one of the earliest systems of inventory control is the two bin system, which   is simple method of control exercised by two simple rules one is used when the order should be placed and other is what quantity should be covered.
II.            Max-min system – under this method, maximum level and minimum level are fixed. Reordering is done after a period of review and order or reorder is placed when the quantity touches a certain level. the weakness of this system is :- stoke levels are actually fixed at lower level since managers have no time to  study inventory level of individual items, recording point and safety stock level one fixed are not frequently changed after study.
Delay in postings makes the records unless for purpose on control as often even actual item can be held up for want of posing which otherwise would have shown that the reorder posting has been touched. Thus it include that any scientific in venture management and control system, control is exercised through the various levels and the order quantity.
          There are two basic inventory controls.
ü Periodic review system
ü Fixed order quantity system
2.7.2- periodic review system
This is a time bound system which requires periodic review of the stock levels of all items. Here periodic review is fixed either three month, six months or once in a year when required
2.7.3- fixed order quantity
Under this system order quantity is fixed but the time is varied. This system recognizes the fact that each item in inventory posses its own unique characteristic and optimum order quantity. Designing of this system requires consideration of many factors such as price, usage rate and other pertinent factors. Maximum and minimum levels are determined for each inventory item and an order or reader point is established in between two levels the order point is computed. In such a manner that by the time new supplies are received the stock balance will fall to minimum and then be replenished again to the maximum.
In order to devise good inventory control system we have to considering what to order, when and how much. The 1st involves planning with repaid to production and marketing requirement. The second two aspects: - order point and order quantity.
Order point will be discussed along with safety stock or buffer stock since  subtle influence of time in transit on total inventory are closely related to the safety stock provisioning to create an impact on inventory control. At this point it would be better to draw distinction between accounting cost and operation costs. However, the objective underlying inventory control is minimizing the cost of procurement storage, handing distribution and other charges. An economic ordering starts with analysis of these varies components costs.
The average inventory will be calculated by adding the month’s end inventory for twelve months of the financial year and dividing the total by twelve.
Inventory management can be interpreted as the avoidance of over statement and under statement in inventories essential as an essential step in improving overall operational efficiency. Determination of right level at investment with production operation schedules and promote service is the crucial at the inventory management.
Inventory control is the function of material management which attempts to maintain stokes at levels at regular interval by counting and valuing required stock at the same interval and by comparing the two sets of the figures to feed intervals and by comparing the two sets of the figures to feed back warning at the variances. (Aroid Sharman 2006)
Inventory form a link between the production and the sale of product. Manufacturing company must maintain a certain amount of inventories; know as work in process during production.
Inventory in transit that is inventory between various stage of production or storage permits efficient production scheduling and utilization resource without this type of inventory each stage production would have to wait for proceeding stage to complete a unit. (N.K new purchasing 1985, p109). 
2.8      Inventory analysis
 The tools inventories are under the following circumstances:
a)    when the manufacture at new product is taken up
b)   When production of the existing product is substantially increased.
The former results in increase in the quantity of existing items where as the later results in increase in number at the item as several new tools will be required. This increase generally takes place at the recommendation the track is debt at value at some purchase many case. This will be covered can be found out. When tools are issued on loan and return only when broken or worn out beyond use, it will be found that the value of tool written of year is very small as compared to the inventory.
2.8.1   General store
The general stores inventory can be chivied in to two categories.
a)    Equipment spares (plant and machinery spare).
b)   Nest such as general eclectic supplies, general hard ware, clearing material oil use for maintenance purpose.
2.8.2   Sales inventory rations.
In manufacturing industry a generally used to norm to judge the efficiently at inventory management is sales to inventory ratios. This ratio of the total sales during the year to the inventory average at the production martial’s i.e. raw materials, working process, time sheet components and finished goods.
Generally speaking inventory make possible smooth and efficient operation of manufacturing origination by decoupling indivisible of the segment of the total operations purchased part of inventory permit activities of purchasing and supply personnel to be planned.
Parts of inventories and components produced in house in an intermittent operation decouple the many individuals machines and production process from various sub assembly and assemble activities. This typically enables management to play production, run individual production areas in a manner which utilize man power and equipment considerably more efficient than if all were feed directly to the final assembly line.
These well planned and efficiently controlled activities of inventories can contribute to the effective operation of firm and firm’s profit. The basic challenge is to determine the inventory level that works most effectively with the operating system. (D.J Armstrong, 1998,6th edition).
The valuation of inventory and cost of goods sold is critical importance to managers and to external areas of finance statements. In many cases inventory is company’s largest asset and the cost of it is largest expense. These two accounts have significant effect on the finical statement subtotal and ratio used in evaluating the liquidity and profitability of business (William’s, 2006 p/356).
Applying different inventory pricing technique on finished goods produced different income measurement magnified a specially in connection with inflationary and deflationary case, but if the price of good is the same for long period of time ,applying different inventory valuation technique produce the same result. But under inflation and deflation, applying different inventory valuation techniques result also different since FIFO assigns the most, recent cost of ending inventory relatively to non- current cost are assigned to goods that have been sold. Thus using FIFO valuation method is mostly importable during inflationary situation (Joseph’s. 2006).


                                                                       CHAPTER THREE
3. Research methodology
 The methodology is a key is part of a scientific research, since it gives detail information about how the research would be designed, source data, sampling technique etc.
 3.1 Research design
So as to put the objective of the study in to effect, descriptive method would be conducted to describe condition, situations and events. It also describes and interpreted the factors and course of the problems.
3.2 Source of data
The study would under taken using primary data both in- person interview and observation of data source.
The primary data would collect from head of marketing department, cost department and general deputy managers of the organization and employees of organization and from direct observation in the factory.                                                                                                                                         3.3 method of data collection
In the study that is aimed to be conducted, evidences are collected from primary data: both interview and observation. The primary data would collect using structured in person interview and direct observation of brothers and flour biscuit factory company.
3.4 Sample, sample size and sampling technique.
 The population from which the representative sample is taken would be the management departments and employees that work in the factory of the company. The study would conducted by taking portion of the population as ample. Since there lower heterogeneity among members of population the lower sample size would require. The purposive (judge mental) sampling technique had used for conducting the study due to sample size to be selected would very small and the researcher wants to determine (generalize) some idea of population in a short time.
3.5 Methods of data analysis
The data conducted has been analyzed in qualitatively and finally based on the analyzed data the researcher gives a recommendation and conclusion by descriptive sentences.

An ad Sharman (2005) material management page 733,789
*  Broch prince page 617,650
*  D.s Armstrong (1998, purchase supplymgmt)
*  J Joseph v. (2006) principle of accounting 13 edition
*  William haka (2005) page 572 edition
*  Roberts, Kaplan and outturn a. Atkinson Advanced accounting page 286
*  R. planner salaam. Production and operation mgmt page 206, 2nd edition
*  Weygandt, in terminate accounting volume 1 page 368-426.
*  Patrick .k page 572, 7th edition
*  Stephen Ross, financial mgmt 2. 618

This interview is prepared in inventory control and valuation system of your organization. It will not bring negative impact both on your job and organization. Your response will kept confidentially and will not be used for any other purpose therefore, I sincerely request you to respond the entire question honestly.
 Data related interview.
(1)            How should the company control loss result with obsolescence’s deterioration theft and wastage?
(2)            How do material enter and reaches the storage areas?
(3)            Which types of inventory is used as raw materials, working in process and main product?
(4)            How should a physical inventory be taken?
(5)            Which inventory system is used in the company perpetual or periodic/why?
(6)              How do you evaluate your inventory?
(7)              What is the speed of inventory turnover, high or low?
(8)                How do revenue and expense evaluated?
(9)               Do you have modern inventory mechanism? Justify if yes?
(10)       What mechanism do you use to get the inventory balance?
(11)       How do companies evaluate the byproducts?
(12)       Which inventory valuation method do you use? Why?
(13)       Is there any problem associated to raw material and order system?
(14)       What is the impact of inventory control and valuation system on the annual sales with relation to annual budgeted sales?
(15)       Inventory valuation at other than cost does the company uses least cost or net realizable value?
(16)       How the company controls the inventory items?



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