Which of the following statements regarding a continuous review (Q) system for inventory control is FALSE?
A) On- hand inventory, scheduled receipts and backorders are used to calculate the inventory position.
B) A fixed quantity of inventory is ordered each time the inventory position reaches a predetermined minimum level.
C) The reorder point is the fixed quantity Q of the item that is ordered each time inventory is replenished.
D) The remaining inventory of an item is tracked every time a withdrawal is made.

Question

Quizplus · Accepted Answer

The reorder point is not the fixed quantity Q that is ordered; rather, it is the inventory level at which a new order is placed. The fixed quantity Q is the amount ordered when the reorder point is reached.

Which of the Following Statements Regarding a Continuous Review (Q)