Question

What types of organizations might use the perpetual system? Why?

Answer 1

Perpetual Inventory System is a system in which inventory is updated everytime a sale or purchase is made. Various computerised systems are used to record sale and purchase of inventory at point of sale and purchase.

This system saves a lot of energy and resources by avoiding extra efforts to manually check and record inventory at a point of time.

Organisations that might use Perpetual System are:

1. Retail Stores such as Walmart - These days Retail stores widely use this system as they have 1000s of items and don't have to keep manual records for all the items in the store. They need to know the time to reorder the stocks if they when they are short with any.

2. Car Dealerships - Car Dealerships also deal in services and spare parts. They have keep a record of the stock of spare parts and issues to the service departments. They use this system to keep record of inventory.

3. Online Selling platforms like Amazon - People like to purchase online. They platforms have to keep a record of the stocks available for sale with various sellers and update the stocks after sale.

4. Beverage Company such as Coca Cola - With companies like Coca cola having daily production, they have to keep record of incoming and outgoing stocks and inventory in end.

5. Warehouses - Warehouses have incoming and outgoing stocks, so a record of inventories is required.

6. Government Organizations - Government organisation buy in bulk from markets and even import and export to other countries whenever any shortage or excess stcosk are there.