_(fixed/variable) EOQ: The basic inventory model. Do you recall the assumptions? Order quantity and Frequency are both Continuous (Q) and Periodic (P) Review Inventory Systems Continuous Review (Q) Periodic Review (P) Inventory Inventory T=Target Inventory 153 R.O.PER IS 1 IS 2 Time Time Reviewed and Order Placed Order Received Order Order Placed Received On-Hand inventory is known all the time Typically, inventory is monitored continuously and an order is placed for a fixed quantity (0) when the re-order point-ROP (R) is reached. FIXED / VARIABLE? The decision of how much to order is The decision of when to order is_ Important decision parameters: Q and R Ris a function of Inventory is reviewed every time periods Typically, inventory status (IS) is reviewed every P periods (example, every 3 days, every week, etc.) and the difference between the target inventory (T) and the current Inventory Status (IS) is ordered. FIXED / VARIABLE? The decision of how much to order is The decision of when to order is_ Important decision parameters: P and T Tis a function of Would you use a Por Q system in the following situations? 1. When there are capacity limitations 2. When you want to combine orders to the same supplier 3. When the supplier dictates delivery schedule 4. When you want to utilize the advantage of quantity discounts