An Advantage of Continuous Review (Q) Inventory Systems Relative to Periodic

question 143

True/False

An advantage of continuous review (Q) inventory systems relative to periodic review (P) inventory systems is that lower levels of safety stock provide savings in holding costs.

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Definitions:

Pooled Estimate

A method in statistics used to combine different estimates of the same parameter to find a single, more precise estimate.

Standard Error

A statistical measure of the variance or standard deviation of a sample mean, indicating the precision with which a sample represents a population.

Assembly Lines

Manufacturing processes in which parts are added to a product in a sequential manner using optimally planned workflows to create a finished product much faster than with traditional methods.

Test Statistic

A value calculated from sample data during a hypothesis test used to determine whether to reject the null hypothesis.