Answer:
The company should adopt a continuous review system, also known as a reorder point system, because it is better suited for managing inventory with uncertain demand and lead time.
In a continuous review system, the inventory level is constantly monitored, and an order is placed whenever the inventory level falls below a certain reorder point. This allows for a more flexible and responsive inventory management system, as the reorder point can be adjusted based on changes in demand or lead time.
In contrast, a periodic review system involves placing orders at fixed intervals, regardless of the inventory level or demand. This can lead to excess inventory or stockouts, as the inventory level is not being constantly monitored.
Given the characteristics of the bats, a continuous review system would be more appropriate. The desired cycle-service level of 95 percent indicates that the company wants to ensure that it has enough inventory to meet demand with a high level of confidence. The uncertainty in demand and lead time, as indicated by the standard deviation of weekly demand and the lead time of 6 weeks, further supports the use of a continuous review system.