Consider a Periodic Review System

question 123

Multiple Choice

Consider a periodic review system. The target inventory level is 1000 units. It is time to review the item, and the on-hand inventory level is 200 units. How many units should be ordered?

• A) 800
• B) 1000
• C) 1200
• D) the EOQ amount
• E) the safety stock amount

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Definitions:

Loans Receivable

Financial assets representing money lent by an entity to a third party, for which the lender expects repayment.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank Notes

Paper money issued by a central bank, constituting a common form of legal tender in many economies around the world.