Discuss the factors to be considere

Discuss the factors to be considered in selecting an inventory system. In general terms, a perpetual system should be used when(1) management and employees need timely information about inventory levels and product sales and (2) the company has the resources to develop this information at a reasonable cost. A periodic system should be used when the usefulness of current information about inventories does not justify the cost of maintaining a perpetual system. Perpetual systems are most widely used in companies with computerized accounting systems and in businesses that sell high-cost goods. Periodic systems are most often used in small businesses that have manual accounting systems and that sell many types of low-cost goods