Question: A certain item is under a continuous review system (meaning, the on-hand inventory level is continuously reviewed, each time when there is an item withdrawal-usage).

A certain item is under a continuous review system (meaning, the on-hand inventory level is continuously reviewed, each time when there is an item withdrawal-usage). If the ordering costs (S) is negligible (i.e., close to zero) and quantity discount is not an important factor to consider (i.e., not an option), how often do you think we should be placing an order (frequently, or infrequently)? And how big do you think the ordering quantity should be (large amount, or small amount)? Based on your understanding of the ABC classification, which class item (A, B, or C) would this type of ordering system be most ideal? Please explain.

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