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John Moffat.
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kakooza
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Sir I am confused of what you meant by average inventory in cost of holding inventory
John Moffat
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The level of inventory in the warehouse keeps changing. When an order has just been received then that is the level of inventory. However that is used up in time and the inventory falls to zero just before they receive a new delivery.
Therefore the average level is half way between the maximum (the amount that is ordered each time) and the minimum (which is zero).
kakooza
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