The University Store, University Auxiliary runs a bookstore operations, considered an over-valued asset at year end. The overestimation was largely a result of changes in the textbook industry, including more frequent text revision cycles and increased competition from Internet service providers and e-books, as well as traditional competitors. The immediate problems were with the inventory valuation loss account for the one-, outdated books and the remaining retail value inventors … Read more »

The University Store, University Auxiliary runs a bookstore operations, considered an over-valued asset at year end. The overestimation was largely a result of changes in the textbook industry, including more frequent text revision cycles and increased competition from Internet service providers and e-books, as well as traditional competitors. The immediate problems were with the inventory valuation loss of disposable, outdated books and make up the remaining retail value inventory for purposes of reporting. Since the non-profit employs Generally Accepted Accounting Principles, it was required to report the inventory according to report, the assessment inventory at lower of cost or market prices. The long-term concern of the management of the shop was the need to manage the risk of inventory obsolescence. Manager needs to assess the weaknesses in inventory management processes and develop control procedures to minimize future warehouse.
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Elizabeth Grace V
Source: North American Case Research Association (NACRA)
11 pages.
Release Date: 1 October 2011. Prod #: NA0188-PDF-ENG
The University Store: Textbook troubles HBR case solution