Jean-Pierre Paquet operates a pet supply store. Jean-Pierre has the opportunity to implement a new perpetual inventory

Question:

Jean-Pierre Paquet operates a pet supply store. Jean-Pierre has the opportunity to implement a new perpetual inventory system. The system would cost $50,000 for installation and training. The company's annual revenues are $850,000. Jean-Pierre is considering this option because as the business grows, maintaining inventory levels is getting more difficult and he must hire additional staff monthly to count the items on hand. Currently the company approximately 2,000 separate inventory items. The company's bank requires up-to-date information on inventory levels and cost of goods sold. Projected revenue growth for the store over the next two years is 10%.
Instructions
(a) What would the benefits be for Jean-Pierre if a perpetual inventory system were implemented?
(b) Are there any drawbacks for the company in implementing a perpetual inventory system?
(c) What would you recommend for the pet supply store?
Stocks
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