You hear someone comment that any inventory is a sign of waste. Do you agree or disagree? Can managers simultaneously justify holding inventories and still seek out ways to lower inventory levels?
Answer to relevant QuestionsIn your own words, what is an inventory driver? What is the difference between a controllable inventory driver and an uncontrollable inventory driver? Give examples.Pam runs a mail-order business for gym equipment. Annual demand for TricoFlexers is 16,000. The annual holding cost per unit is $2.50, and the cost to place an order is $50. What is the economic order quantity?Suppose that KraftyCity has to pay $50 per workbench for orders under 200 but only $42 per workbench for or ders of 201 or more. Using the information provided in problem 7, what order quantity should KraftyCity use?David Polston prints up T-shirts to be sold at local con certs. The T-shirts sell for $20 each but cost David only $6.50 each. However, because the T-shirts have concert-speciﬁc information on them, David can sell a ...The following figure shows an Excel spreadsheet that compares total ordering and holding costs for some current order quantity to the same costs for the EOQ and calculates how much could be saved by switching to the EOQ. ...
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