Final answer:
The true statement among the given options is A) The two-bin system is an example of the order point system. The other statements regarding safety stock and order quantities are false.
Step-by-step explanation:
The question at hand relates to inventory management systems used in businesses. Here, we'll discuss which of the listed statements are true:
- A) The two-bin system is an example of the order point system. This statement is true. In the two-bin system, inventory is divided into two bins. The first bin holds enough stock to meet demand while an order for more stock is placed and delivered. When the first bin is empty, the order point is reached, which triggers reordering of stock.
- B) The safety stock does not depend upon the frequency of reorder. This statement is false. Safety stock is inventory kept on hand to prevent stockouts and is often influenced by the frequency of reorder. If reorders are frequent, a business might opt for lower safety stock.
- C) Order quantities are fixed in the periodic review system. This statement is false. In the periodic review system, the order quantity can vary because orders are placed at regular intervals, and the quantity ordered is based on the inventory level required to replenish stock up to a pre-determined level.
Therefore, the correct answer is A) The two-bin system is an example of the order point system.