Inventory System Costs
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Identify and explain the types of costs that are involved in an inventory system.
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347 words; 1 reference; 3 types of costs in an inventory system
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According to Bosari, the three types of costs involved in an inventory system are as follows:
1. Safety Stock - These are the costs associated with carrying standard inventories to keep the goods on hand to satisfy consumer demand. It may be a challenge to optimize the safety stock levels because demand is always in flux but the fluctuating nature of demand is more challenging as companies need to keep the right supply available most of the time despite the unpredictability of the consumer demand. Most companies calculate statistics so that they ...
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