Question

The continuous review system is used to manage inventory associated with independent demand, while the periodic review system is used to manage inventory associated with dependent demand. True or false?

Answer 1

Answer:

FALSE

Explanation.

Periodic inventory is a practice of inventory count that takes stock every week or month while 'continuous inventory' constantly tracks inventory levels mostly through a computerized method so that stock levels. are always known.

It is not very correct that the continuous review system is used to manage inventory associated with independent demand, while the periodic review system is used to manage inventory associated with dependent demand because most often, it is the nature of inventory that determines the method to be used and not the type of demand

Continuous inventory keeps a constant track of quantities; and is more appropriate for small unit items that could be too numerous for physical count because they are bought in large quantities. e.g. supermarkets

Periodic inventory has to be done with big items that are not too numerous like automobiles, televisions, houses and sets of furniture.