In the fixed-period system, managers must make two key decisions: the time interval between reviews and the replenishment level.

Question

Quizplus · Accepted Answer

In the fixed-period system, managers must determine the time interval between reviews, but the replenishment level is determined based on the demand during that time interval. Therefore, the second key decision in the fixed-period system is the order-up-to level, which is the level of inventory to be ordered to bring the inventory position up to a desired level at the time of review.

In the Fixed-Period System, Managers Must Make Two Key Decisions