1. What is Perpetual Inventory Calculation?

Perpetual inventory calculation is a method of continuously tracking inventory levels in real-time. It provides up-to-date information about inventory quantities by recording all receipts and issues as they occur.

2. How Does the Calculator Work?

The calculator uses the perpetual inventory formula:

Where:

• \( Previous \) — Previous inventory quantity (units)
• \( Receipts \) — New stock received (units)
• \( Issues \) — Stock issued or sold (units)

Explanation: This formula maintains a running balance of inventory by adding new receipts and subtracting issues from the previous balance.

3. Importance of Inventory Management

Details: Accurate inventory tracking is crucial for effective supply chain management, preventing stockouts, reducing carrying costs, and optimizing cash flow in business operations.

4. Using the Calculator

Tips: Enter previous inventory quantity, new receipts, and issues in units. All values must be valid (non-negative numbers).

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between perpetual and periodic inventory?
A: Perpetual inventory updates continuously, while periodic inventory is counted at specific intervals (weekly, monthly).

Q2: What are the benefits of perpetual inventory system?
A: Real-time tracking, reduced stockouts, better demand forecasting, and improved inventory accuracy.

Q3: What technology is used for perpetual inventory?
A: Barcode scanners, RFID systems, and inventory management software are commonly used to maintain perpetual inventory records.

Q4: Are there limitations to perpetual inventory?
A: Requires initial setup investment, needs regular system maintenance, and may still require periodic physical counts for verification.

Q5: Can this calculator handle multiple items?
A: This calculator is designed for single item inventory calculation. For multiple items, each should be calculated separately.