What is a continuous inventory?

Sometimes it is referred to as an eternal inventory, a continuous inventory is a means of maintaining a systematic documentation process that is always in line with a physical supply at hand. Since the items are removed from the supply or supply area for use or consumption, the detail of the continuous stock is adjusted to notice the reduction of physical inventory. Many businesses use this method to ensure that the necessary goods are always at hand, and as a reminder of the re -order of some key products if necessary.

Maintenance of a continuous inventory is common for production facilities where it is constant to replace worn parts on production machines. In general, the area of ​​supplies is set up somewhere at the production point and the inventory manager is accused of sight of physical and book inventory situations. Individuals who need to obtain parts or other maintenance and repair supplies often approach the managerial request for what is needed. The manager is enteringinto a storage for a physical inventory, loads the item or items and deliver them to the requesting party. At this point, the inventory administrator can use the application for a written product to deduct items from the book inventory, thereby returning the physical and written inventory back to synchronization.

In many manufacturing situations, there are regular reconciliation processes that will double the book inventory against the physical inventory. For example, the company may require that the number of physical hands be at least twice per calendar year in the physical inventory. The results of the number of hands are compared with the book inventory and the modifications made as needed. This process acts as a secondary control system and balance to ensure the stability of a continuous inventory.

One main advantage of the Conclusion of Nuous Inventory is that it makes it easier to plan key parts and stocks as soon as the stock level reaches a specified low point.When publishing a recent paycheck to the book inventory, the Inventory Administrator notices when the number of units in the physical inventory slips below a certain point and begins the order processing process for other units. This process helps to ensure that there are always enough parts and supplies to make the production machine properly in operation.