The efficiency of an inventory system is often measured by the turnover ratio.(TR), defined by TR =

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The efficiency of an inventory system is often measured by the turnover ratio.(TR), defined by TR = Cost of goods sold per year / Average value of on hand inventory

a. Does a high turnover ratio indicate an efficient inventory system?

b. If the EOQ model is being used, determine TR in terms of K, D, h, and Q.

c. Suppose that D increases. Show that TR will also increase. Does this make intuitive sense?

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Practical Management Science

ISBN: 978-1305250901

5th edition

Authors: Wayne L. Winston, Christian Albright

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Question Posted: Nov 03, 2018 11:12 AM

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The efficiency of an inventory system is often measured by the turnover ratio.(TR), defined by TR =

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Turnover ratio a Yes a large turnover ratio indicates that the average amount of ...View the full answer

Practical Management Science

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