Which One of the Following Statements Concerning a Continuous Review

question 152

Multiple Choice

Which one of the following statements concerning a continuous review system is best?

• A) The inventory position (IP) of an item measures the item's ability to satisfy future demand, relying only on the on-hand inventory.
• B) An item's inventory position under a continuous review system increases by Q units as soon as an order is received.
• C) An item's on-hand inventory increases by Q units as soon as an order is placed.
• D) Under a continuous review system, an item's inventory position corresponds to the on-hand inventory unless there are backorders or one or more scheduled receipts.

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Definitions:

Exxon

An American multinational oil and gas corporation, one of the world's largest publicly traded energy providers and chemical manufacturers.

Mobil

An American oil company now merged with Exxon to form ExxonMobil, one of the world's largest publicly traded international oil and gas companies.

Chevron

An American multinational energy corporation, one of the world's leading integrated energy companies, involved in every aspect of the oil and gas industry.

John D. Rockefeller

An American industrialist and philanthropist who was a co-founder of the Standard Oil Company and became one of the world's wealthiest individuals.