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How Computers Are Used to Maintain Perpetual Inventory Systems

Updated on July 14, 2011

Perpetual inventory can be defined as a method of maintaining inventory on a continuous basis. Maintaining perpetual inventory systems with the help of computers is quickly becoming the norm. Records for a perpetual inventory system can be maintained manually, but it is a time-consuming and outdated method.


Example of How Computers Are Used to Maintain the Perpetual Inventory System of a Retail Store

Step 1 – Details about each inventory item (unit size, quantity, etc.) are recorded and stored in an inventory record.

Step 2 – Each individual inventory record combines to make up the computerized inventory file. The resulting total should be reflected in the inventory ledger account.

Step 3 – When an item is purchased or returned an employee scans the item’s bar code with an optical scanner. The scanner reads the magnetic code and the inventory record/data that pertains to the item is adjusted accordingly.

Step 4 – On a random or infrequent basis a physical inventory count is taken. This count is compared with the current computerized balances and a list of overages and shortages is printed.

Step 5 – Inventory balances are adjusted to reflect the quantities recorded from the physical inventory count.

Using computers to maintain a perpetual inventory system has many advantages. Inventory quantities can be continuously monitored. Stock that may be selling fast can be reordered before it is depleted. Additionally, past sales patterns can be analyzed to determine when to put certain items on sale or when to stock certain seasonal items. Data can also be analyzed to determine the effectiveness of an ad campaign or a promotional sale.


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