iRobot was founded in 1990 by two roboticists and their professor at the Massachusetts Institute of Technology. Their vision was to make practical robots a reality, and that vision has been a success. In 2010, iRobot generated more than $ 401 million in revenue, with its award- winning Roomba ® floor-vacuuming robot leading the charge. Roombas are powered by a rechargeable battery and have sensors that detect particularly dirty spots and prevent the robot from falling off ledges.
iRobot sells its robots and accessories directly and through various distributors and retailers. To sell these products, iRobot and the retail stores must keep inventory on hand. These companies must also select a method of inventory valuation, which is important because the amount of ending inventory has a significant impact on a business’s bottom line. In this chapter, you learned the various methods of inventory valuation and the importance of the value of ending merchandise inventory. What type of inventory system and valuation method do you think a company such as iRobot would use? Why?