What are the two major decisions to be made when using the periodic review system?
A) the time between orders and the target inventory level
B) the time between orders and the on-hand inventory
C) the target inventory level and the on-hand inventory
D) the time between orders and the order quantity
E) the target inventory level and the order quantity

Question

Quizplus · Accepted Answer

The two major decisions to be made when using the periodic review system are the time between orders and the target inventory level. The time between orders determines how often inventory is reviewed and ordering is done, while the target inventory level is the amount of inventory that needs to be maintained until the next review period. These two decisions are interdependent and have a significant impact on inventory holding costs, stockouts, and order frequency.

What Are the Two Major Decisions to Be Made When