5.
Optimum size of material: Overstocking and under stocking can be avoided because perpetual inventory system covers verification of stock with regards to maximum, minimum and other levels.
6.
Lack of misuse of Material: Under this system, effective control on issue of material is possible, thus misuse of material can be avoided.
7.
Moral Check on Stores staff: Due to continuous checking, this system serves as a moral check on the stores staff. They are discouraged from committing dishonesty.
8.
Loss of stock due to obsolescence: It is detected at an early stage and so timely action can be taken to prevent recurrence.
THE SELECTIVE INVENTORY CONTROL OR ABC SYSTEM OF CONTROL Most manufacturing firms find themselves confronted with virtually thousands of different inventory items. Most of these items are relatively inexpensive, while other items are quite expensive and account for a large portion of the firm’s investment. Some inventory items, although not expensive, turnover slowly and therefore, they require a high average investment. The firm should classify them into A.B.C category items. Category A will include more expensive items (in cost of product) with high investment and it will require more intensive control. The ‘B’ group will consist of the items accounting for the next largest investment.