Novak, Ralph S.
M.S. (Master of Science)
Department of Management
Problem. Inventory evaluation of university presses had not evolved into one accepted method. It was the purpose of this study to compare several methods used to evaluate inventory and ascertain their relationship to various management functions. The following hypotheses were formulated: 1. Over a period of fifteen years there is a significant difference in total net sales resulting from the use of any of the six different methods of inventory evaluation. 2. There will be a positive coefficient of correlation between net sales and cash flow in each of the different methods of inventory evaluation. 3. There will be a positive coefficient of correlation between recorded inventory value and inventory value computed by multiplying physical count by a per volume value which reflects all assignable costs. Procedures for this study were as follows: 1. Operating data for a hypothetical university press were devised from A.A.U.A., U.P.S. statistical report along with patterns developed by experts. 2. Operating statements for fifteen years were devised for each of six inventory evaluation methods. 3. The results of the six methods along with cash flow need of the manufacturing operation and the inventory values at cost for each of the fifteen years were summarized. 4. The summarized data were statistically analyzed. Findings and Conclusions The first hypothesis was rejected with reservation. The second and third were both accepted with a large significance probability. The following conclusions were made: 1. The correlation coefficient between net sales and cash flow was highest in the method which assigned an early write off in the years of greatest cash flow needs. 2. The correlation coefficient between recorded inventory and inventory value was highest in the methods which did not record inventory write off expense directly to the inventory account. 3. Because of the long term rate of inventory turnover there is a need for further study of funding methods.
Bergren, Louis E., "The relationship of university press inventory evaluation to management decisions" (1976). Graduate Research Theses & Dissertations. 6204.
vi, 47 pages
Northern Illinois University
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