The technique of fixed-order quantity involves a company:
A) ordering exactly what is needed.
B) specifying the number of units to order whenever an order is placed.
C) placing a replenishment order whenever the on-hand inventory level falls below a minimum level.
D) determining the order quantity using the total demand for the item in the next n months.
E) ordering a quantity that will maintain the inventory at a predetermined maximum level.

Question

Quizplus · Accepted Answer

The fixed-order quantity technique involves ordering a specific number of units every time an order is placed. This is in contrast to the fixed-time period technique which involves placing orders at set intervals irrespective of inventory levels.

The Technique of Fixed-Order Quantity Involves a Company