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Inventory-As order size increases, total?

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As order size increases, total:
inventory costs will increase, reach a maximum and then quickly decrease.
inventory cost will decrease, reach a minimum and then increase.
ordering costs will initially increase while total carrying cost will continue to decrease.
carrying cost decreases while the total ordering cost increases.

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Solution Summary

As order size increases, total:
inventory costs will increase, reach a maximum and then quickly decrease.
inventory cost will decrease, reach a minimum and then increase.
ordering costs will initially increase while total carrying cost will continue to decrease.
carrying cost decreases while the total ordering cost increases.

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See Also This Related BrainMass Solution

Healthcare Organizations and inventory control

"Once you identify your physical inventory status, a popular idea used in business to help evaluate your inventory control process is the inventory turnover rate (or ratio) - a topic discussed earlier in McLean in the financial statement analysis chapter. In general business, the inventory turnover ratio is defined as sales divided by inventories, and companies can compare their calculated ratios with industry averages. The questions evaluate this issue in more detail as it pertains to Healthcare Organizations."

In your response please reference the attached chapter from McLean, Robert A. (2003). Financial Management in Health Care Organizations (2nd ed.). Albany, NY: Delmar Publishers.

In practical terms, how would you determine the inventory turnover rate for a HCO which focuses on patient care? How would you use this rate to help manage such a HCO's inventory levels? What are the key problems and issues involved in calculating and using the inventory turnover rate in HCOs?

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