Which advantage is pointed out for periodic review systems?

In the context of supply chain management, periodic review systems are designed to assess inventory levels at regular intervals rather than continuously. This method facilitates a balance between inventory management and operational efficiency.

One of the key advantages of a periodic review system is that it allows organizations to make adjustments to inventory levels based on demand fluctuations observed during the review periods. This can lead to lower safety stock requirements because the system helps to determine the appropriate reorder level based on updated demand forecasts and lead times. Essentially, by reviewing inventory systematically, businesses can maintain a sufficient stock level without holding excessive inventory, which reduces the costs associated with overstocking.

While cost-efficient transportation is important, it is not a primary advantage discussed in the context of periodic review systems. Instead, the focus lies on inventory levels, safety stock management, and reordering processes. Therefore, the advantage regarding lower safety stock requirement captures the essence of how periodic review systems function effectively to manage inventory against fluctuations in demand, ensuring that businesses maintain efficiency in their supply chain operations.