What Are The Advantages And Disadvantages Of Perpetual Inventory System?
Perpetual inventory system has several advantages such as real-time tracking of inventory levels, accurate cost of goods sold (COGS) calculation, and the ability to detect inventory theft or loss. This system also provides businesses the ability to make timely decisions, set reorder points, and reduces the need for physical inventory counts. However, there are also some disadvantages such as high start-up cost, complex implementation process, and the need for continuous training and maintenance. In addition, errors such as data entry mistakes or theft can affect the accuracy of perpetual inventory system.