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

question 134

Multiple Choice

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.

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Definitions:

Straight-Line Depreciation

A technique for computing an asset's depreciation that presumes the asset depreciates by a consistent amount annually throughout its expected lifespan.

Expansion Project

An expansion project involves undertaking new initiatives or investing in resources to grow a business or increase its capacity.

Crossover Point

The crossover point is the moment when two or more alternatives have the same value or cost, often used in financial analysis to determine when an investment will start to be profitable.