Wouldn't the perpetual be better for when the supplier uses an open order window? You would have a better idea of how much inventory you have and allows you to plan better for the demand?
Good point! But, what happens if the retailer needs to replenish inventory and the order window is closed? They'll have to wait to place the inventory order and possibly lose customer orders to competitors. I'm sure some companies with perpetual inventory systems use suppliers that use open order windows, but there is a huge benefit to meeting demand, especially unexpected demand, when an inventory order can be sent electronically at anytime. I hope this helps.
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You are a very great teacher, love how you break it down.
Thanks! Glad to help.
thanx alot . Please share more information on accounting topics
No problem - Accounting is coming real soon! Don't worry.
thanks, this is an awsome resource...
You're welcome! Glad to help.
Wouldn't the perpetual be better for when the supplier uses an open order window? You would have a better idea of how much inventory you have and allows you to plan better for the demand?
Good point! But, what happens if the retailer needs to replenish inventory and the order window is closed? They'll have to wait to place the inventory order and possibly lose customer orders to competitors. I'm sure some companies with perpetual inventory systems use suppliers that use open order windows, but there is a huge benefit to meeting demand, especially unexpected demand, when an inventory order can be sent electronically at anytime. I hope this helps.
Pure knowledge!
Thanks!