Final answer:
Jamie's retail phone business in San Francisco would benefit from a perpetual inventory system due to real-time accuracy and better decision-making support, despite the higher initial investment required compared to periodic inventory systems.
Step-by-step explanation:
The question concerns whether Jamie should use a periodic or perpetual inventory system for his retail phone business in San Francisco. The main difference between these two systems is how often the inventory records are updated. A periodic inventory system updates inventory levels at a set, periodic interval, often at the end of the accounting period. In contrast, a perpetual inventory system updates inventory counts continuously as transactions occur.
A perpetual inventory system would likely be more beneficial for Jamie's business for several reasons:
- It provides real-time inventory tracking which helps in maintaining optimal inventory levels.
- It reduces the chances of stockouts and overstock situations.
- Gives a clearer picture of inventory turnover, aiding in better decision-making.
However, a perpetual system often requires a larger initial investment in technology and staff training. For a high-volume retail business like Jamie's, especially in technologically adept San Francisco, having an accurate, real-time overview of inventory could be crucial for customer satisfaction and operational efficiency. Therefore, the perpetual inventory system might be the better choice, assuming Jamie's business can support the initial investment.