Which of the following best describes the term ‘periodic review’?

Which of the following best describes the term ‘periodic review’?
A . Items are reviewed and orders placed depending on requirements
B . Items are reviewed when the Kanban is triggered
C . Items are reviewed when the price is at its lowest
D . Items are reviewed as part of an imprest system

View Answer

Answer: A

Explanation:

Periodic review refers to a system where inventory levels or the conditions of assets are reviewed at regular intervals, and necessary actions (like ordering more inventory, maintenance, etc.) are taken based on the current requirements. It’s a proactive approach to ensure that the management is keeping up with the demands or maintenance schedules of the assets.

B, C, and D don’t adequately describe what is commonly understood by a ‘periodic review’ in asset management.

Option B is related to the Kanban system which is a specific type of inventory management system, but it is not descriptive of what ‘periodic review’ is generally.

Option C seems more related to a strategy for purchasing items rather than a description of ‘periodic review’.

Option D references the imprest system, which is primarily a method for managing petty cash, not really applicable to the ‘periodic review’ in the broader sense of asset management.