Which One of the Following Is Not True Regarding the Fixed

question 50

Multiple Choice

Which one of the following is not true regarding the Fixed Period System (FPS) ?

• A)The time between orders is constant, but the order quantity might vary.
• B)An order is time-triggered, not inventory-triggered.
• C)The optimal replenishment level includes the demand during the review period plus any desired safety stock.
• D)When demand is not certain, the FPS requires more safety stock than the equivalent FQS.

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Definitions:

Liquidity Ratio

A financial measure used to determine a company's ability to cover its short-term obligations with its most liquid assets.

Financial Obligations

Commitments to pay money to another party, including debts, salaries, taxes, and other liabilities.

Acid-Test Ratios

A financial metric that evaluates a company's ability to pay off its short-term liabilities with its quick assets, providing insight into its short-term financial health.

Liquidity Ratios

Financial metrics used to determine an organization's ability to pay off its short-term debts with its liquid assets.