The Fixed-Period Inventory System Requires More Safety Stock Than a Fixed-Quantity

Multiple Choice

The fixed-period inventory system requires more safety stock than a fixed-quantity system because:

A) a stockout can occur during the review period as well as during the lead time.
B) this model is used for products that have large standard deviations of demand.
C) this model is used for products that require very high service levels.
D) replenishment is not instantaneous.
E) setup costs and holding costs are large.