• Since, the receipts are much less frequent than issues; the method is not so cumbersome
because calculation of new prices arises only when fresh lots are purchased.
• This method evens out the effect of widely varying prices of different consignments.
• Issues may not be at the current economic values.
• Where receipts are numerous this method requires a good deal of calculations.
• Profit or loss may arise out of pricing.
• Issue price may run to a number of decimal points.