Perpetual versus Periodic Inventory Systems - Perpetual versus Periodic Inventory Systems The main difference between the two systems is how often the

Perpetual versus Periodic Inventory Systems - Perpetual...

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Perpetual versus Periodic Inventory Systems The main difference between the two systems is how often the inventory record is updated. For a periodic system, this occurs periodically which could be 1x week, 1x month or even 1x a year. While a perpetual inventory system maintains its inventory count in real time by relying on bar coding and scanning, so when an item is sold and scanned, the inventory stock is reduced by this event. A perpetual system reduces the need to count the inventory as frequently. However, it is still necessary to count inventory in order to make sure that quantities maintained by the perpetual inventory software reflect the physical reality on the shelves. As in the case of Wal-Mart in which the point-of-sale enables for suppliers to identify which inventory are selling and if replenishment is required. The benefit of what are called cycle counts in a perpetual inventory system is that the entire balance sheet worth of inventory does not need to be counted all at once —which can be a disruption to operations. Reference: Vonderembse, M. & White, G. (2013). Operations management . Bridgepoint Education.

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