Periodic review policies require more safety inventory than continuous review policies for the same level of product availability.

Question

Quizplus · Accepted Answer

Periodic review policies involve ordering inventory at fixed intervals, which can result in higher safety stock levels to ensure product availability during the time between orders. Continuous review policies, on the other hand, involve ordering inventory when stock levels reach a predetermined threshold, thereby potentially reducing the need for as much safety stock.

Periodic Review Policies Require More Safety Inventory Than Continuous Review