What are the 2 types of inventory control system?

What are the 2 types of inventory control system?

• A. Fixed quantity system and continuous review system
• B. Periodic review system and JIT system
• C. Fixed quantity system and periodic review system
• D. Fixed quantity system and stock-control system

Answer: (C)

The two main ways inventory is reviewed and orders are placed are fixed quantity (order a constant amount each time) and periodic review (place orders at fixed time intervals). In the fixed quantity system, you trigger an order when stock falls to a reorder point, ordering a fixed quantity each time to bring stock back up. In the periodic review system, you review and order at regular intervals, with the order size sized to cover expected demand during the interval plus any safety stock. These two capture the common approaches to controlling stock levels: how often you review and how much you reorder. Other options mix in approaches that aren’t considered the standard two categories here—continuous or perpetual review is often viewed as the same idea as fixed quantity in practice, JIT is more about a broader production/flow philosophy, and a generic stock-control system isn’t a specific inventory-control framework.

The two main ways inventory is reviewed and orders are placed are fixed quantity (order a constant amount each time) and periodic review (place orders at fixed time intervals). In the fixed quantity system, you trigger an order when stock falls to a reorder point, ordering a fixed quantity each time to bring stock back up. In the periodic review system, you review and order at regular intervals, with the order size sized to cover expected demand during the interval plus any safety stock. These two capture the common approaches to controlling stock levels: how often you review and how much you reorder.

Other options mix in approaches that aren’t considered the standard two categories here—continuous or perpetual review is often viewed as the same idea as fixed quantity in practice, JIT is more about a broader production/flow philosophy, and a generic stock-control system isn’t a specific inventory-control framework.