What is fixed order quantity system?

The first policy choice is through a system called a fixed-order quantity system. Therefore, two variables define this system and answer the two basic questions of when to order and how much. The first is an order quantity, Q, and the second is a reorder point, ROP. As the name suggests, the quantity ordered with this system is constant or fixed and is denoted by Q. An order is placed when the inventory position drops to some predetermined level.