Which one of the following descriptions of a base-stock system is best?
A) It is particularly attractive when review and ordering cost are both significant.
B) It can be seen as a way to minimize cycle inventory.
C) Examples include gasoline storage tanks at a service station.
D) An item's inventory is stored at two different locations or "bins."

Question

Quizplus · Accepted Answer

Option B provides the most accurate and concise description of a base-stock system. It highlights the main objective of this inventory control method, which is to lower cycle inventory to reduce costs. Options A, C, and D are not specific enough or accurate in describing a base-stock system.

Which One of the Following Descriptions of a Base-Stock System