Which type of inventory system has a higher chance of being inaccurate due to human error?

• A. Perpetual inventory system
• B. Consignment inventory system
• C. Just-in-time inventory system
• D. Periodic inventory system

Answer: (D)

Verified step by step guidance

1. Understand the different types of inventory systems mentioned in the problem: Perpetual, Consignment, Just-in-Time, and Periodic inventory systems.
2. Recognize that the Periodic inventory system relies on physical counts of inventory at specific intervals, which introduces a higher chance of human error during these manual counts.
3. Compare this to the Perpetual inventory system, which continuously updates inventory records with each transaction, reducing reliance on manual processes.
4. Note that Consignment inventory and Just-in-Time inventory systems are specialized methods that focus on inventory ownership and timing, respectively, and are less prone to inaccuracies caused by manual counting.
5. Conclude that the Periodic inventory system has a higher chance of being inaccurate due to its dependence on manual physical counts, which are susceptible to human error.