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Inventory control
The document discusses inventory control and economic order quantity. It begins by introducing inventory control concepts like holding costs and inventory decisions. It then derives the equation for economic order quantity (EOQ), which is the order size that minimizes total annual inventory costs. EOQ balances ordering costs, which increase with more frequent smaller orders, and holding costs, which increase with larger less frequent orders. The document provides examples of how to calculate EOQ given annual demand and ordering and holding costs. It concludes by mentioning ABC analysis, which classifies inventory items into A, B and C categories based on their value and turnover to prioritize inventory management efforts.
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