Fossil Group, Inc Essay Example | Topics and Well Written Essays - 750 words

Fossil Group, Inc - Essay Example These include brands such as Superman, Elvis Presley, Snoopy, Wonder Woman, Chronicles of Narnia, The Matrix and Star Wars. This paper outlines the inventory policies and items that Fossil Group Inc. adopts in their operations and offers in the market respectively. Apart from selling products directly to consumers through commercial websites and retail stores, Fossil owns a global distribution network that includes wholesale outlets in countries where the company has a physical presence. In countries that it does not have a physical presence, the company maintains third-party networks that facilitate the marketing and distribution of its products. Fossils’ inventory policy is primarily based on the average cost of production, which includes related freight charges and applicable duty. Inventory that is unmarketable or obsolete is determined by the difference between market value estimates and the approximate costs of inventory. Such estimates are based on assumptions regarding future demand, available channels for liquidation and prevailing market conditions. Additional reductions in inventory are thereby inevitable in the event that market conditions and future product demand are regarded by management to be less favorable than what had been projected. Reductions in inventory are also inevitable if the management determines that channels for liquidation are insufficient. The company’s success in inventory management is hence largely attributed to continuous assessment of off-price sales and regular updates of inventory estimates. Revenue from sales of products likely to be subjected to agreements in inventory consignment is often determined at the point where title and risk of loss has been transferred, products have successfully been delivered, buying price at the end of the chain can easily be determined, and there is reasonable assurance in collectability of the product. In the event that inventory is