A fixed order quantity system is more susceptible to stockouts than is a fixed order interval system.

Question

Quizplus · Accepted Answer

A fixed order quantity system triggers orders based on inventory levels, ensuring stock is replenished when it drops to a certain point, which can help in avoiding stockouts. A fixed order interval system orders at set intervals, which might not align perfectly with actual inventory needs, potentially leading to stockouts if demand is higher than expected between orders.

A Fixed Order Quantity System Is More Susceptible to Stockouts