Question: Inventory control serves several important functions and adds a great deal of flexibility to the operation of the firm. Provide 3 importance/purpose of inventory control

  1. Inventory control serves several important functions and adds a great deal of flexibility to the operation of the firm. Provide 3 importance/purpose of inventory control and explain each? (5 marks)

  2. The objective of most inventory models is to minimize the total costs. With the assumptions just given, the relevant costs are the ordering cost and the carrying, or holding cost. All other costs, such as the cost of the inventory itself (the purchase cost), are constant. Under what circumstances can inventory be used as a hedge against inflation? (5 marks)

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