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When is the ordering cost decreased?
Ordering cost falls while the size of order increases. It is because when the size of order raises for the similar quantity of inventory purchased annually, in that case less orders and thus administration cost would be needed for example, staff, phone calls and paperwork etc.
What are the basic controllable variables of a production planning problem? What are the four major costs? Discuss and explain each variable. Discus and explain each cost.
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