A fixed-period (FPS) inventory system:
A) orders a fixed-period quantity when the inventory position reaches or drops below the reorder point (r).
B) chooses a replenishment level (M) which includes the demand during the review period and lead time, plus any safety stock.
C) maintains a constant order quantity every review period.
D) assumes that the demand for an item is constant and continuous, and that the items are withdrawn at a constant rate.

Question

Quizplus · Accepted Answer

In a fixed-period inventory system, the replenishment level (M) is determined to cover the demand during the review period and lead time, including safety stock. This system does not order at a fixed quantity or assume constant demand.

A Fixed-Period (FPS) Inventory System