TYPES OF INVENTORY SYSTEM Operations Management Assignment Help

TYPES OF INVENTORY SYSTEM

requires that every time a withdrawal from or an addition to inventory is made. records must be updated to ensure that the reorder point has or has not been reached. For the fixed-time period  model. inventory is counted only at the end of the review period. 0 counting takes place in the interim (although some firms have created variations of systems that combine features of both). Some additional differences that tend to influence the choice of systems

Fixed-Order-Quantity and Fixed- Time-Period Systems

system focuses on order quantities and reorder points. Procedurally. each time a unit is taken ut of stock, the withdrawal is recorded and the amount remaining in inventory is immediately compared to the reorder point. If it has dropped to this point or below, an order for Q items is placed. If it has not, the system remains in an idle state until the next withdrawal. In the fixed-time-period system. a decision to place an order is made at a predetermined time interval (for example. each week or month). when the stock is counted or reviewed. Whether an order is actually placed depends on the inventory status at that time

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