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What are some of significant characteristics of fixed order quantity system under replenishment systems?



A. Safety stock is kept to take care of increase in demand during lead time as well as to meet demand when lead time is extended.
B. Re-order level equals safety stock plus average consumption during lead time.
C. Average inventory equals safety stock plus half of reorder quantity.
D. Stock of finished goods.

This question is part of Production Planning and Control
Asked by S_mai_s, Last updated: Jul 13, 2020

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John Smith

John Smith

Answered Apr 17, 2017

Safety stock is kept to take care of increase in demand during lead time as well as to meet demand when lead time is extended.
Re-order level equals safety stock plus average consumption during lead time
Average inventory equals safety stock plus half of reorder quantity.
 

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