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CHOOSING ORDER QUANTITY (SIZE—PROBLEM)
The objective of inventory decisions is usually to minimize total inventory costs to the company. Costs are ascribed to all elements which are of interest in reaching its inventory decisions (e.g. purchasing costs, stock out costs etc.), and solutions, are derived based on these costs.
Several inventory planning models exist. These models can be classified into two basic classified into two basic classifications:
(1) Deterministic Models:—whereby all parameters are known with certainty, e.g. lead-time, annual demand, and so on.(2) Stochastic Models:—in which parameters (particularly demand and lead time) are not known with certainty, but follow known probability distributions (i.e. risks).
Compute the equ units of production?
what is Long term budgets Long term budgets: The budgets are prepared to depict long term planning of the business. The period of long term begets various between five to ten
MAKE OR BUY DECISIONS (NO LIMITING FACTORS) The choice between making and buying a given component is one which is likely to face all businesses at some time. It is often one
Coleman, a married taxpayer, is going to establish a manufacturing business. He anticipates that the business will be profitable immediately due to a patent he holds. He predicts t
According to the Philadelphia Inquirer, in 2004 the city of Philadelphia planned to spend $14 million to convert the Convention Center into an appropriate venue for the Republican
Change of Technology: Changes in technology commonly leads to improvements in the efficient processing of raw material, reduce in wastages, more speedy production and higher produ
Cash management is related along with the management of: Cash outflows and inflows of the firm Cash flows inside the firm Cash balances as financing deficit and inve
Significance points of Variance The following significant points must be kept in mind: Controllability: Controllability should also influence the decision whether t
Elements of cost: 1. Material: the substance from which the product is made is known as material it may be in a raw or a manufactured state. It can be direct as well as indir
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