Find at least one business example of a fixed-order quantity system versus a fixed-period quantity system. What are their differences? Which do you think is better, and why?

Question

Business

Gabriel Noble

14 April, 13:49

Find at least one business example of a fixed-order quantity system versus a fixed-period quantity system. What are their differences? Which do you think is better, and why?

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Everett Evans · Answer 1

A drugstore would an example of a fixed-order quantity system while a grocery store would be an example of fixed-period quantity system, these would be some possible examples in general; at the same time every business would need to take into account the sales of the company in order to determine the best model according to the specific movement in the market.

Explanation:

The first business model, fixed order quantity system refers to the method that checks inventory constantly in order to be continuously ordering according to a predefined number of limit in the stock, it is a way to control inventory.

The second business model, fixed period quantity system takes into account a period of time to order inventory; what changes in this kind of model is the ordered quantity according to the previous movements of the products.

In my opinion the first model is more adequate since the merchandising is supposed to have always a minimum stock, in this way the company would have a better control of the inventory.