Which of the following statements regarding a periodic review (P)system for inventory control is FALSE?
A) An item's inventory position is reviewed periodically rather than continuously.
B) The quantity ordered each time is a fixed lot size Q equal to the reorder point (R).
C) Stockout protection is required for a longer time interval than continuous review systems for inventory control.
D) The target inventory level is set based on the average demand during the protection period plus safety stock.

Question

Quizplus · Accepted Answer

The quantity ordered each time in a periodic review system is not necessarily a fixed lot size Q equal to the reorder point R. It can vary depending on the amount needed to reach the target inventory level.

Which of the Following Statements Regarding a Periodic Review (P)system