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Explain the need to balance ordering and holding cost.

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Question added by isabella joseph
Date Posted: 2016/04/26
Nitin Choudhary
by Nitin Choudhary , Assistant Manager - Planning & Inventory Management , Green Planet Industries

The balance point of ordering cost & holding cost is actually the minima of total inventory cost.

That is, its the minimum you can go on your overall inventory cost. Hence the need to balance it.

 

In any other case the total cost will increase from this minima.

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