Walmart Inventory and Internal Control

Summary

Mahir's video explores Walmart's inventory management and internal control systems. Walmart, the world's largest retailer by revenue, uses a Perpetual inventory system supported by advanced technologies like satellite communication, POS systems, RFID, and robotics. The US employs LIFO for inventory valuation, while Canada uses FIFO due to tax regulations. Walmart also enforces strict internal controls to prevent fraud and ensure operational efficiency, including segregation of duties, documentation procedures, access controls, and security measures against shoplifting. These strategies help Walmart maintain a competitive edge and serve millions of customers globally.

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Q & A

What is Walmart's position in terms of revenue according to the Fortune Global 500 list in 2019?

Walmart is the world's largest company by revenue, with 54.4 billion million US dollars according to the Fortune Global 500 list in 2019.

What type of inventory system does Walmart use in its department stores?

Walmart uses a Perpetual inventory system in all its department stores, which shows a continuous balance of inventory as items are purchased.

How does Walmart's investment in a sophisticated inventory tracking system benefit the company?

Walmart's investment in a sophisticated inventory tracking system allows for tracking inventory, easy communication between headquarters and individual stores, access to sale records, and efficient problem management.

What is the purpose of Walmart's investment in POS systems?

Walmart's investment in POS systems helps identify each item sold, find its price, create accurate sales receipts, and store data for analyzing sales and reordering inventory.

How does RFID technology assist Walmart in managing inventory?

RFID technology helps Walmart track goods throughout the supply chain, ensuring the right products are in the right stores at the right time, enhancing efficiency, and saving labor costs and time.

What is the role of Bossa Nova Robotics in Walmart's inventory management?

Bossa Nova Robotics are autonomous self-scanning robots that collect essential inventory information, ensuring products are in the right location, stocked sufficiently, and avoiding collisions with the help of cameras and sensors.

Why does Walmart conduct periodic physical inventory counts?

Walmart conducts periodic physical inventory counts to ensure the accuracy of Perpetual inventory records, determine inventory on hand, and identify lost inventory due to waste, shoplifting, or employee theft.

What inventory valuation method does Walmart use in the United States, and what are its benefits?

In the United States, Walmart uses the Last In First Out (LIFO) method for inventory valuation, which creates a tax benefit during inflation by producing a higher cost of goods sold and lower inventory, resulting in a smaller tax liability.

Why does Walmart Canada use the First In First Out (FIFO) inventory valuation method?

Walmart Canada uses the FIFO method because LIFO is not acceptable for income tax purposes in Canada. FIFO is important for perishable items, ensuring that the oldest stock is sold first, and it corresponds with the normal physical flow of goods.

What internal control activities does Walmart implement to ensure successful procedures in their stores?

Walmart implements several internal control activities including segregation of duties, documentation procedures, access controls, and required approvals to prevent fraud, control risk, protect assets, and operate efficiently.

How does Walmart protect against shoplifting and ensure a safe environment in its stores?

Walmart protects against shoplifting through installed surveillance cameras, alarm systems, and security guards at the front of doors. It also recommends asking customers to leave their backpacks and belongings at the front of the store with a tag system.