A difference between periodic review and continuous review inventory systems is:
A)Periodic review is more expensive than continuous review
B)Continuous review usually requires more safety stock than periodic review
C)In one system,time triggers orders; in the other,quantity triggers orders
D)Periodic review requires real-time monitoring systems

Question

Quizplus · Accepted Answer

The main difference between periodic and continuous review inventory systems is the trigger that initiates an order. In periodic review, the order is triggered based on a fixed frequency (time trigger), while in continuous review, the order is triggered when the inventory level reaches a specific point or threshold (quantity trigger). This means that in continuous review, less safety stock is needed, as the inventory level is monitored in real-time, and orders are placed more frequently, ensuring that the stock level never falls below the threshold.

A Difference Between Periodic Review and Continuous Review Inventory Systems