EOQ inventory

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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March 27, 2019 at 3:53 am #510535
alikhakar
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When we are given buffer stock in the question, we add their holding cost to the total holding cost…
Are we also required to add their purchase cost to total purchase cost ?
Thanks
March 27, 2019 at 8:14 am #510553
John Moffat
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No – holding buffer stock does not mean that they are buying more over the year. It just means that they are ordering new deliveries sooner than in a perfect world they would need to.
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