Two Fundamental Inventory Decisions Are: When to Order and How

question 23

Multiple Choice

Two fundamental inventory decisions are: when to order and how much to order. Which of the following statement is TRUE about fixed-quantity (FQS) and fixed-period (FPS) inventory systems?

• A) An FPS orders a fixed-period quantity when the inventory position reaches or passes the reorder point (r).
• B) An FPS must cover a time period of T + L to cover the risk of a stockout.
• C) An FPS places an order for an economic order quantity (EOQ) on a continuous basis.
• D) An FQS places an order to replenish the inventory position up to a target level (M) when the inventory position reaches the reorder point (r).

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Definitions:

Organizational Culture

The cognitive component that includes the shared assumptions and beliefs of the organization.

Organizational Climate

The general perception or 'feel' of the workplace environment as perceived by employees, influenced by management practices, policies, and culture.

Stable

Characterizes something that is not likely to change or falter; having consistency or permanence.

Organizational Unfairness

Perceptions or experiences of inequity, bias, or injustice within a workplace or institution, often leading to dissatisfaction, demotivation, or conflict among employees.