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.