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

question 152

Multiple Choice

Which of the following statements regarding a periodic review (P) system for inventory control is FALSE?

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

---

Definitions:

Economic Instability

A condition characterized by significant fluctuations in economic performance, manifesting in variables such as prices, demand, employment, and GDP.

Money Supply Growth

An increase in the total amount of money in circulation or in the economy within a specific period.

Monetarists

Economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods, and that the objectives of monetary policy are best met by targeting the growth rate of the money supply.

Monetary Rule

A guideline for the monetary policy stating that the central bank should aim at regulating the money supply to maintain stable prices, output, and employment.