An Inventory System Answers Two Important Questions: When to Order

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 period.