Question

Describe the strengths and weakness of Fixed Quantity system (FQS)

Answer 1

The order quantity or the lot size is fixed for the fixed quantity systems and the same size is ordered every time whenever the reorder point reaches. The main advantage of FQS is that by monitoring the status of the inventory, it is easy to know when there would be requirement for additional inventories. It helps to plan inventory in the case of systems with irregular requirement for inventories and the inventory can be ordered as per the demand.

The weakness includes higher cost and time consuming to monitor the inventory. If the orders are placed at irregular time periods, it may create inconvenience for the inventory suppliers. When the demand increases there will be shorter time between the models as the order size should be kept constant. Continuous record keeping is required in FQS and it should record continuously whenever an addition or withdrawal of order is made.