Excess of inventories are undesirable due to the following reasons; MTH601
MTH601 Quiz 1 Solution and Discussion
@zaasmi
If the item is held in stock, the cost involved is the item carrying or holding cost. Some of the costs
included in the unit holding cost are
(1) Taxes on inventories,
(2) Insurance costs for inflammable and explosive items,
(3) Inventory Control
@zaasmi
In the deterministic type of inventory control, the parameters like demand, ordering quantity cost, etc are already known or have been ascertained and there is no uncertainty. In the stochastic inventory control, the uncertain aspects are taken into account.
First let us consider the inventory control of the deterministic type. There are four EOQ models which are discussed below. The first one is the well-known Wilson’s inventory model.
Which of the following times are not directly related to the activity cost as there is no certainty of time in such activities so their duration cannot be reduced, hence the cost cannot be expressed correctly?
CPM Times
Pert times
The parameters like demand and ordering quantity cost are quite --------- in the Deterministic inventory models. MTH601
Which of the following cost of an item varies directly with the size of inventory as well as the time the item held in stock? MTH601