Flores Department Store Currently Uses the Periodic Inventory System

question 165

Essay

Flores Department Store currently uses the periodic inventory system.
REQUIRED: Explain what the advantages would be to Flores if it uses the perpetual inventory system. Assume that Flores can use a computer system which is linked to its cash registers and that all products have bar codes that can be read by bar code readers attached to the cash registers.

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Definitions:

Consumer Equilibrium

A condition where a consumer has allocated their income in a way that maximizes their utility, given their budget constraints and the prices of goods and services.

Utility

In economics, the total satisfaction received from consuming a good or service.

Income

Earnings received by a person or entity, typically through work, investments, or business ventures, over a specified period.

Consumer Equilibrium

The point at which the quantity of goods consumed by the consumer provides the maximum satisfaction, making utility maximization with budget constraints.