What type of inventory control system should he use?

Question

Jim Reed, II had just left a rather unpleasant meeting with his banker, Harold Holmes of First Virginia National Bank. Jim had banked with First Virginia for almost 30 years and his father, who had established Reed’s Clothier in 1934, had

only banked with First Virginia. Holmes, however, had just informed Jim that the bank would not extend their line of credit any further. In addition, the over due note payable for $130,000 must be paid within 30 days. Jim could not

believe that Holmes had the temerity to tell him he needed to drastically reduce the store’s inventory and to strongly suggest an inventory reduction sale. Since its founding, Reed has only held the industry’s traditional semiannual sales—in January and July. Although Jim was piqued by this young banker’s demand, the note was over 45 days past due, and Jim did not know how he could make any more than a token payment on the note within the next 30 days.

Answer 1

Too late for inventory control.  He is about to lose his whole inventory to the bank if the loan is a "recourse" loan.  The bank will gather it and sell it to settle the debt.  A bank is a private institution and can make any rules they want. If Reed didn't like the terms, he was free to go elsewhere.

But if you want an answer to your question... his inventory control would be "private".  he would count his inventory himself daily or weekly. /