Economic Order Quantity, timing of orders and safety stock are three important considerations in inventory management.Required: A. Explain each of these considerations.B. How is EOQ affected by the timing of orders and safety stock?
What will be an ideal response?
A. EOQ is a mathematical model that minimizes the costs of ordering and holding inventory. Timing of orders takes into account any lead time necessary between placing and receiving the inventory ordered. Safety stock allows for fluctuations in usage and minimizes losses due to lost production.
B. The need for a lead time when placing orders and maintenance of a safety stock will alter the selection of the EOQ. Proper weighting of the three will result in cost minimization by the company.
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A) exceed some target cash flow level set by management. B) result in a return that exceeds the cost of funds to finance the project. C) have the lowest NPVs after discounting cash flows by the project's capital cost. D) are subject to less risk than competing projects. E) produce higher returns than the firm's average cost of capital.
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A. Equal Pay Act B. Gender Equality Act C. Civil Rights Act of 1991 D. Title VII of the Civil Rights Act E. Age Discrimination in Employment Act
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