# Forecasting with Indices

## Forecasting with Indices

• Submitted By: cartermd
• Date Submitted: 10/31/2012 12:15 PM
• Words: 662
• Page: 3
• Views: 253

Abstract
Summer Historical Inventory Data
Month Year 1 Year 2 Year 3 Year 4 Average Total
1 18,000 45,100 59,800 35,500 39,600 158,400
2 19,800 46,530 30,740 51,250 37,080 148,320
3 15,700 22,100 47,800 34,400 30,000 120,000
4 53,600 41,350 73,890 68,000 59,210 236,840
5 83,200 46,000 60,200 68,100 64,375 257,500
6 72,900 41,800 55,200 61,100 57,750 231,000
7 55,200 39,800 32,180 62,300 47,370 189,480
8 57,350 64,100 38,600 66,500 56,638 226,550
9 15,400 47,600 25,020 31,400 29,855 119,420
10 27,700 43,050 51,300 36,500 39,638 158,550
11 21,400 39,300 31,790 16,800 27,323 109,290
12 17,100 10,300 31,100 18,900 19,350 77,400
Avg. 38,113 40,586 44,802 45,896 42,349 42,349
Inventory management is vitally important for any business that sells a physical product. An inventory system must balance having enough inventories on hand to meet the demand of customers while investing as little money as possible in inventory (Wells, n.d.). The vital importance of inventory is noted, and just as important are the many systems that can be utilized to compile and present inventory data. This paper will compare and contrast different types of inventory systems.

Periodic Inventory Method
The periodic inventory method is used to calculate inventories within specific accounting periods or fiscal year. “Under the periodic method we periodically determine the amount of goods remaining in inventory where periodic is defined once every accounting period and usually at the end of the accounting period” ("Inventory Methods and Issues", n.d., para. 8). Therefore, the ending inventory number for that accounting period will be used as the beginning inventory number for the new accounting period allowing businesses to operate within their financial means.
Perpetual Inventory Method
The perpetual inventory method is a continuous inventory method used to track products on a daily basis. Perpetual methods are meant to...