A disadvantage of the fixed-period inventory system is that: select one:
a. Since there is no count of inventory during the review period, a stockout is possible.
b. Orders usually are for larger quantities.
c. It involves higher ordering costs than the fixed quantity inventory system.
d. Additional inventory records are required.
e. The average inventory level is decreased.
Answers
option (((C)))
It involves higher ordering costs than the fixed quantity inventory system.
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Answer:
Explanation:
Fixed-period inventory system :
A fundamental inventory system known as a periodic inventory system is the fixed period inventory system. This technique requires you to physically count the goods only when you want to update your company's inventory balance. A physical inventory count might take a lot of time, even if your business doesn't sell a lot of different products. The more varied the things your business sells and the bigger the quantity, the harder it is to count. Because of this, the majority of businesses only perform a physical inventory count once every quarter or year, which is why this approach is referred to as "fixed period" or "periodic."
A disadvantage of the fixed-period inventory system is that it involves higher ordering costs than the fixed quantity inventory system.
Therefore, Option (C) is correct answer.
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