Final answer:
A manual inventory system is hand-counted and not automatically updated, often used by businesses that are smaller or want to avoid the cost of automated systems.
Step-by-step explanation:
The inventory system that is typically hand-counted rather than automatically updated is known as a manual inventory system. In such a system, physical counts of inventory are done periodically to determine the quantity on hand. This process is often time-consuming and more prone to errors compared to an automated inventory system, where software updates the inventory levels as soon as a sale or a restocking occurs.
Businesses that use manual inventory systems may do so for a variety of reasons, including the cost of implementing an automated system, the simplicity of their inventory, or because they are small operations where manual counts are feasible. However, as a company grows, the need for accurate, up-to-date inventory data often makes an automated system more appealing and cost-effective in the long run.