For a continuous review (Q) inventory system, with uncertain demand a company is only at risk of running out of stock over the lead time (L) required to receive an order.

Question

Quizplus · Accepted Answer

In a continuous review system, inventory levels are constantly monitored, and orders are placed when stock reaches a certain reorder point. The risk of stockouts occurs during the lead time, as demand is uncertain and inventory is being replenished.

For a Continuous Review (Q) Inventory System, with Uncertain Demand