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1. You have better possibilities of taking advantage of quantity discounts from a supplier.
2. There is the chance to combine orders to reduce shipping costs.
3. Ordering costs may be lower because you will place fewer orders from each supplier, because you may order all of the items from supplier
Fixed Period Ordering System
It is an inventory control method where orders are periodically placed, but the order quantity is different every time, and is also called Fixed Period Deficit Ordering System. The method has the following features: * An order is periodically placed. * The order quantity is different every time. * Even relatively large fluctuations in demand can be handled properly. * Even seasonal variation can be handled modestly. * The inventory volume can be reduced compared with ordering point system. * A-group items are usually best for this method. * Longer lead time is acceptable. * Longer time for paperwork is needed.
Well answer add by Mr. Vinod <<<<<<<Agree
The system can be automated for automatic order fulfillment, continuous inventory management example is the tie up between coke and walmart in the US
Mr. Jetley has answered this question .. no need to add an additional comment
agreed with the answer of Mr. Vinod Jetley . Good simple explanation .
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