To differentiate: The fixed-quantity inventory system and the fixed-period inventory system. Introduction: Fixed-quantity inventory (Q) system: It is an inventory management system where the replenishment of the stock is ordered when the existing stock reaches a certain reorder point. The replenishment quantity is kept fixed irrespective of any external circumstances. Fixed-period inventory (P) system: It is an inventory management system where the orders are placed periodically from time to time. The order quantity is different every time.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 13DQ

Summary Introduction

To differentiate: The fixed-quantity inventory system and the fixed-period inventory system.

Introduction:

Fixed-quantity inventory (Q) system:

It is an inventory management system where the replenishment of the stock is ordered when the existing stock reaches a certain reorder point. The replenishment quantity is kept fixed irrespective of any external circumstances.

Fixed-period inventory (P) system:

It is an inventory management system where the orders are placed periodically from time to time. The order quantity is different every time.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Critical Incident Report- Dietary Mangement Critical incidences involve critical thinking and problem solving techniques. This exercise is the opportunity to analyze and decide on the appropriateness of the action and to determine better ways to solve problems, approach employees and get the job done. This exercise should help in doing it better the next time. As you observe or become more involved in the situations that require problem solving or critical thinking use this exercise to identify the what, who, and when and determine how the actions taken or not taken affected the outcome. You must write up two or more experiences. The summary is to include two parts: 1. Objective data of what occurred and how it occurred: 2. Analysis of what happened and what we could or would have done to make the outcome better.

Prepare a graph of the monthly forecasts and average forecast demand for Chicago Paint Corp., a manufacturer of specialized paint for artists. Compute the demand per day for each month (round your responses to one decimal place). Month B Production Days Demand Forecast Demand per Day January 21 950 February 19 1,150 March 21 1,150 April 20 1,250 May 23 1,200 June 22 1,000' July 20 1,350 August 21 1,250 September 21 1,050 October 21 1,050 November 21 December 225 950 19 850

The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,300 January 1,500 May February 1,700 June 2,100 March April 1,700 1,700 July August 1,900 1,500 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. The average monthly demand requirement = units. (Enter your response as a whole number.) In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers). Ending E Period…