An Inventory System Answers Two Important Questions: When to Order

question 22

Multiple Choice

An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q system (continuous review system) or a P system (periodic review system) answers these questions?

• A) Under a Q system, a fixed quantity is ordered every P time period.
• B) Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R.
• C) Under a P system, a fixed quantity Q is ordered when the inventory position reaches the reorder point R.
• D) Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods.

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Definitions:

Internal Tension

Psychological stress or discomfort that arises from conflicting beliefs, thoughts, or feelings within oneself.

Unmet Biological Needs

Basic physiological requirements including food, water, shelter, and warmth that are not adequately satisfied, impacting overall health and well-being.

Incentive

Something that motivates or encourages an individual to do something or to achieve a goal.

Environmental Stimulus

Any external event or factor that influences an organism's behavior or physiological responses.