A periodic review system requires less safety stock

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Reference no: EM131037917

Which of the following statements is TRUE?:

a. A Periodic Review system requires less safety stock than a Continuous Review system.

b. Over the long run, a Periodic Review (P) system and a Continuous Review (Q) system will generally have the same average order frequency and order size as each other (assuming that the manager aims to minimize the total of annual holding and ordering costs in both of the cases).

c. In a Periodic Review system, order quantities tend to remain the same from order to order, while in a Continuous Review system, order quantities tend to vary from order to order.

d. A Periodic Review system requires a computerized record-keeping system to maintain constant awareness of inventory position.

e. All four answer choices are TRUE

Reference no: EM131037917

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