Which inventory management practice involves monitoring stock levels continuously?

Which inventory management practice involves monitoring stock levels continuously?

• A. Min-max
• B. Perpetual inventory
• C. ABC inventory
• D. Fixed order quantity

Answer: (B)

The practice that involves monitoring stock levels continuously is known as perpetual inventory. This system allows for real-time tracking of inventory levels by recording every addition and subtraction to stock as it occurs. This continuous monitoring enables organizations to maintain accurate records of inventory on hand, anticipate stock shortages, and manage reordering processes more effectively. In a perpetual inventory system, businesses can rely on up-to-date information, which aids in better decision-making regarding inventory control. It differs from other methods, such as min-max, which sets specific minimum and maximum inventory levels to trigger restocking, or fixed order quantity, which involves ordering a predetermined amount of stock at regular intervals. ABC inventory management pertains to categorizing inventory into three classes based on importance but does not focus on the continuous tracking of stock levels like the perpetual system does. Hence, perpetual inventory best describes the practice of monitoring stock levels continuously.

The practice that involves monitoring stock levels continuously is known as perpetual inventory. This system allows for real-time tracking of inventory levels by recording every addition and subtraction to stock as it occurs. This continuous monitoring enables organizations to maintain accurate records of inventory on hand, anticipate stock shortages, and manage reordering processes more effectively.

In a perpetual inventory system, businesses can rely on up-to-date information, which aids in better decision-making regarding inventory control. It differs from other methods, such as min-max, which sets specific minimum and maximum inventory levels to trigger restocking, or fixed order quantity, which involves ordering a predetermined amount of stock at regular intervals. ABC inventory management pertains to categorizing inventory into three classes based on importance but does not focus on the continuous tracking of stock levels like the perpetual system does. Hence, perpetual inventory best describes the practice of monitoring stock levels continuously.