The Weighted Average Inventory Cost Method is an accounting system that uses an average cost of a product to determine the cost of goods sold and inventories. It calculates the value of inventory by evaluating costs including purchasing, production, transport and storage over time. This approach seeks to provide an accurate reflection of any changes in cost while also considering supply and demand influences. By utilizing this method, businesses are able to make well-informed decisions regarding pricing, inventory control and profitability analysis.