Implications of Price Control and its influence on Merchandise Inventory Management

Bachelor's Degree.Public Accounting / MSc.Science of Higher Education.

The great changes and challenges generated by globalization, free trade, consumer demands for high quality products, as well as inflation, the exchange system and price regulations, force companies to have innovative businessmen who create and manage them according to the national and international market trends projected for the future, with the firm purpose of preserving themselves in time and space and making organizations more competitive, as they are the main engine of the country's economic development.

However, the control exercised by the Venezuelan State with the application of laws governing the matter, have tried to find a way out of the problems affecting small and medium-sized companies, and for this reason, without any benefit or resolution of the problem, the regulation of prices of products or items of basic necessity was presented, which was intended to reduce a series of illicit activities, such as: Speculation, hoarding and price increases that affect not only the population, but also the inventory stocks of the same, who day by day struggle to survive with the minimum economic profits generated, as well as the progressive increase in the prices and costs of the merchandise.

As described by Gutiérrez (2016), price control is "an instrument or mechanisms that allows the State to regulate the prices of some goods or services to be offered to the population and thus, achieve the maximum social welfare". In other words, it refers to the means employed by a State to ensure the welfare of society by preventing the imposition of exaggerated prices and guaranteeing that products, goods and/or services are within the reach of the entire population.

However, in spite of the great efforts made with the fixing and control of prices, the country has been affected by the inflationary process that currently reigns in the market, which beyond achieving the benefit of the community, has had a negative impact on the companies who have seen their growth and commercial development affected, bringing as a consequence many companies closed, others that have had to change their economic activity, to seek to stay in other markets, since they do not get any profitability.

It is important to point out that these organizations are the basis of the economy of a country by offering what they produce, to improve the quality of life of its inhabitants; and they are continuously looking for the necessary tools to improve their productivity, as well as that of their employees, and at the same time, they guarantee an effective inventory management that implies keeping stocks to protect themselves against uncertainties at the lowest cost.

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1.- Gutiérrez, S. (2016). The formation and control of prices in Cuba. Electronic edition. Available at: www.eumed.net/libros/2066c/195/.