Conducted an extensive inventory analysis

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Reference no: EM131106681

Austin (1977) conducted an extensive inventory analysis for the United States Air Force. He found that for over 250,000 items the annual holding cost was assumed to equal 32% of the item's purchase price. He also found that when an order was placed for most items, a fixed cost of over $200 was incurred. The Air Force held one month of safety stock for each item. Given this limited information, discuss how the Air Force could improve its inventory policies. (Hopefully, it has done so since the study was performed.)

Reference no: EM131106681

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