Question

An advantage of the fixed-period inventory system is that:

A. safety stock will be lower than it would be under a fixed-quantity inventory system.

B. there is no physical count of inventory items when an item is withdrawn.

C. no inventory records are required.

D. the average inventory level is reduced. E. orders usually are for smaller order quantities.

Answer 1

Answer: B) There is no physical count of inventory items when an item is withdrawn

One of the advantage in adopting the fixed period inventory system is there is no physical count of inventory items when an item is withdraw. Because order quantities are different everytime thus there is no physical count of inventory when an item is withdrawn.