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When are the holding costs raised?
Holding cost rises while the size of order rises. It is since a higher level of average stock will be kept during the year. Thus holding cost would comprise the cost of warehousing, staff and systems to assists and keep-up inventory, also the cost of insurance, damage, obsolescence, theft and deterioration, even is the cost of money or cash tied up as an example of cost of capital, that is the opportunity cost of investing within inventory.
Owner Kay Fay is considering franchising her Oriental Express restaurant concept. She believes people will pay $5.50 for a large bowl of noodles. Variable costs are $2.75 a bowl. F
Product Layout - Disconnected Flow any products or components (eg toys, shoes, many electronic components) are required in volumes which do not justify continuous operation,
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#question. 1. how does a formal procurement policy affect customer service
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