Using the periodic review system the target level is:
A) forecast demand during lead time
B) forecast demand during the review period
C) the sum of a and b
D) the sum of a and b plus the safety stock
E) none of the above

Question

Quizplus · Accepted Answer

The target level in a periodic review system is the sum of the forecast demand during the lead time, the forecast demand during the review period, plus the safety stock. This ensures that there is enough inventory to meet demand during both the lead time and the review period, with an additional buffer (safety stock) to account for variability in demand or lead time.

Using the Periodic Review System the Target Level Is