In a(n) ________ inventory system, an order is placed for a variable amount after a fixed passage of time.
A) periodic
B) continuous
C) optimal
D) economic

Question

Quizplus · Accepted Answer

In a periodic inventory system, order is placed for a variable amount after a fixed passage of time, which can be daily, weekly, or monthly. This system is suitable for small businesses that do not have complex inventory needs and do not want to invest in expensive technology solutions. The inventory level is only checked at the end of each cycle, which can result in stockouts or excessive inventory, but can be managed with safety stocks and reorder points. On the other hand, continuous inventory systems monitor inventory levels in real-time and trigger orders when they fall below a certain threshold, which requires more sophisticated tracking systems and software, but can result in more accurate and efficient inventory management. Therefore, the periodic inventory system is the best choice for the given scenario. Options C) optimal and D) economic are not relevant to inventory systems but refer to optimization models and decision-making criteria in inventory management.

In A(n) ________ Inventory System, an Order Is Placed for a Variable