Question:

Take an interview from any merchandising organization. Ask

relevant inventory related questions. Prepare a report on it, and
give remarks on it.
Answer:
Introduction of the Company:
An interview was conducted from the “Bomber Jackets Official”, that is an online based
business which provides customized jackets and all the new trendy shirts, jackets, caps which are
needed by their customers. It was started in July, 2016. Over its one year of business it has won
the awards of “Customized Name Trend Setter 2016” and “Best Customization House.” It deals
its customers online through Instagram and Facebook. They provide high quality and creative
custom made T-shirts, caps and bomber jackets to all classy and trendy people out there. Their
each and every article is made very creatively with fine fabric and unique printing along with
their own original designs. They were the first company in Pakistan with the idea of customized
names in English, urdu or Arabic on the back of the bombar jackets. It is their second year now.
They also welcomes their customer’s valuable designs for printing. Due to their vast business in
their field of clothing, they were asked a few questions regarding how they manage and record
their inventory which is discussed as follows:

Interview:
A structured open ended questionnaire was developed for knowing the basic things related to
inventory of Bomber jackets and the analysis of each question, with the recommendations-that
are more appropriate for their business according to inventory management are given below with
each question:

Question no 1:
Which method is used by your company for recording inventory?

Answer:
He answered, I always make the excel sheet to record the inventories (all the materials, inputs). I
update this inventory system every week so that I would have a clear idea that how much
inventory is less and how much I should produce more. I use excel sheets for inventory recording
because it gives good inventory management that helps me figure out exactly how much

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inventory I need. This makes it easier to prevent product shortages and keep just enough
inventories on hand without having too much. I usually use the average of the costs of goods to
assign costs.

Question no 2:
Do you face any problem regarding the maintenance of your inventory?

Answer:
He answered, No; I do not face any kind of problem regarding the maintenance of inventory
because I do not use any technical software for that. I simply use the excel sheets that is very
easy to use and do not cause any kind of problem. I also update it regularly so I do not face any
problem that others might face. Even using excel sheets for inventory management, it saves a lot
of my time.

Question no 3:

Have you changed your method of recording inventory over the past years?

Answer:
He answered, yes; I changed the method of recording inventory. When I started the business, I
used to record the inventory on phone but when the business starts growing and number of orders
increased I switched it to the proper database system that is excel sheets where I started to
maintain the records of incoming and outgoing.

Question no 4:
Do you keep yourself prepared for the peak season?

Answer:
He answered, Yes, I have to keep my company and employees prepared for the peak season
because when peak season hits, we do not get time to maintain the inventory and at that time we
cannot afford the delays in orders. I also maintain enough of inventory for any kind of
uncertainties and prompt orders so that the customers will not face any inconvenience or delay
and send them the orders in 3-4 days even if they are customized.

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Question no 5:
Do you have conflicts with the logistics and accounting department; if you have, had
now how did you resolve it?

Answer:
He answered, I handle the accounts myself so I do not find any conflict with anyone as I manage
and update the accounts myself regularly. When I talk about logistics as far as Lahore is
concerned I do not face any conflict because I have my own riders for delivery and cash. I faced
many complications when it comes to delivering the products in different cities. I took the
services of TCS and Leopard Courier, and received many complaints from customers about their
service that they deliver the products very late and they go only once and if they found nobody at
home, they do not go again to deliver the products. So, after this conflict I hired a local Pakistani
company as my registered partners that deliver cash and carry service in all over Pakistan. They
are easy to track and to connect with. They take the work very seriously and take this
responsibility to deliver the order on time even if they found nobody at home, they go again and
deliver. And now I am really satisfied.

Question no 6:
If you come across any errors in inventory, how would you act?

Answer:
He answered, I always act in a very mature way; I do not get panic whenever I find any error in
anything. I try to handle things nicely so in that way I always find a solution of that very
problem.

Question no 7:
How do you ensure that there is a right balance between your customer demand and
inventory level?

Answer:

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He answered, in the beginning, I did not have much idea about the customer demand and
inventory level as inventory level was always lower than the customer demand. So, after some
time I got to know about different time periods, customer needs, the peak and low season, the
time when the inventory gets low and when gets high, when inventory increases and when
decreases. Now I always maintain a right balance between customer demands and inventory
level. I know that at which time my inventory can decrease or increase so I always prepare my
company and inventory management for a sufficient amount of supply to be matched with
customer demand.

Question no 8:
What do you think cost of goods means to your company?

Answer:
He answered, Cost of goods means everything because one should always have to be cost
efficient whenever doing any business. Every business is always in a way to minimize the cost of
goods or expense so that they will get good profit. But minimizing the cost does not means
minimizing the quality in fact that means that minimizing the cost with the maximum of quality.
I do not compromise the quality of my products to minimizing the cost. If anything is expensive I
usually buy it because that makes my company different from my competitors.

Question no 9:
Do you ensure that your inventory meets the standards of quality as quoted by your
company?

Answer:
He answered; we always ensure that whatever the standard company has set, should be
maintained. We do not believe in lowering the quality if someone has ordered in bulks. Rather,
we try to enhance the quality to retain the customers so that they will order from us again. Till
now, we do not get much of complaints in our quality as we always to innovate in things and to
enhance the quality. According to the survey we once done, we found that we provide the best
quality as compare to our competitors. So, our customers are satisfied with the products quality
and the other terms and conditions of the company.

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Question no 10:
If the supplier does not provide you the raw materials on time what would you do?

Answer:
He answered, I never rely on only one supplier and, I always suggest others too that one should
not rely on only one supplier because you never know about him as person he can betray you
anytime about anything. So, there is always a risk of getting the raw materials from one supplier.
I have three suppliers, one is from international market and two are from local market and I got
the material that is imported. So, It never happens with me that I face any difficulty from my
suppliers because whenever the international one do not provide the raw materials I got it from
the locals ones which are almost the same.

Conclusion (Analysis):
As we have evaluated all the answers provided by owner we can see that he uses the “Weighted
Average Method” to record his inventory because he said that he use “Average of the cost of
goods to assign costs to inventory” which means “Total cost of inventory is divided by total
number of units available for sale”.

The costs of goods under weighted average will be between the cost levels determined by FIFO
and LIFO. FIFO (First in, First out) is preferable in times of rising prices, so that the costs
recorded are low and income is higher, while LIFO (Last in first out) is preferable in times
when tax rates are high because the costs assigned will be higher and income will be lower.

According to us, he is using the safest method to record his inventory because his business is not
so old so he should play safe to make it live longer and he is being cost efficient and very safely
playing the game to maintain the standards of his business by using three suppliers and by hiring
the company who delivers outside the Lahore which is very good for an online business.

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