Why an organisation finds it cost-effective to make smaller

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1. Give examples of costs included in annual carrying costs of stock when using the EOQ decision model.

2. ‘Holding safety stocks needlessly ties up capital in stock.' Comment on this statement.

3. Name two cost factors that can explain why an organisation finds it cost-effective to make smaller and more frequent purchase orders.

4. ‘Accountants have placed stocks on the wrong side of the balance sheet. They are a liability, not an asset.' Comment on this statement by a plant manager.

Reference no: EM13936900

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