Which one of the following statements concerning a continuous review system is best?
A) An item's on- hand inventory increases by Q units as soon as an order is placed.
B) 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.
C) The inventory position (IP) of an item measures the item's ability to satisfy future demand, relying only on the on- hand inventory.
D) An item's inventory position under a continuous review system increases by Q units as soon as an order is received.

Question

Quizplus · Accepted Answer

In a continuous review system, the inventory position includes on-hand inventory, backorders, and scheduled receipts, so it matches the on-hand inventory unless there are backorders or scheduled receipts.

Which One of the Following Statements Concerning a Continuous Review