Discuss the below:
Q: The largest non- labor cost of the operating budget in most healthcare organizations are materials, supplies, pharmaceuticals and the changing demand for healthcare services. Any mismanagement and lack of supervision can have a significant impact on the budget of the organization (Nowicki 238). Inventory management is essential to ensure that items are being used and money is not tied up in the inventory. Unused items, for extended period of time may affect the cash flow of the organization. At what point do we apply the first-in, first-out (FIFO); last-in, first-out (LIFO) principle? How important is it for organizations to use the FIFO and LIFO system of inventory? How does it affect cash flow?