Which statement describes a 'Periodic Review System'?

A 'Periodic Review System' is characterized by the practice of reviewing inventory levels and making replenishment decisions at fixed intervals. This means inventory is not continuously tracked but rather assessed at specific times, which is why the option about requiring frequent physical counts for accuracy aligns with the concept. The periodic nature of the review can lead to discrepancies between reviews due to fluctuations in demand or lead times, making regular physical counts essential to ensure that inventory records are accurate when decisions about ordering are made.

In contrast, continuously updating inventory counts based on real-time data pertains more to a Continuous Review System, which aims to have real-time visibility of inventory levels without the physical counts inherent in a periodic system. The idea of precise inventory management irrespective of order frequency implies a level of flexibility in inventory practices that does not accurately reflect the fixed schedule of assessments in a periodic system. Lastly, the assertion that it is the most expensive system to maintain does not inherently describe a periodic review system, as costs can vary depending on various factors including the operational context and the specific methods employed.