An Inventory System Answers Two Important Questions: When to Order

question 6

Multiple Choice

An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q system (continuous review system) or a P system (periodic review system) answers these questions?

• A) Under a P system, an order is placed to replenish the inventory position up to the target level T every P time period.
• B) Under a Q system, a fixed quantity is ordered every P time period.
• C) Under a P system, a fixed quantity Q is ordered when the inventory position reaches the reorder point R.
• D) Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R.

Differentiate between normal goods and inferior goods based on income elasticity and price elasticity of demand.

Understand the concept of cross elasticity of demand and how it indicates the relationship between goods.

Apply the midpoint formula to calculate the price elasticity of demand.

Analyze how changes in price affect the quantity demanded based on the elasticity coefficient.

---

Definitions:

International Labour Legislation

Laws and regulations that govern work and employment relations across national borders, aimed at protecting workers' rights globally.

Solicit Job Seekers

The process of attracting or inviting individuals looking for employment to apply for job openings.

Performance Evaluations

The systematic assessment of an employee's work performance, typically conducted on a regular basis to identify strengths and areas for improvement.

Known To The Firm

This refers to individuals, businesses, or information that is already familiar or has an established relationship with the firm.