(Essay) A plant manager and her controller were discussing the plant’s in¬ ventory control policies one day. The controller suggested to the plant man¬ ager that the ordering policies needed to be reviewed because of new technology that had been put in place in the purchasing department. Among the changes that had been implemented in the plant were installation of Cl) computerized inventory tracking, (2) electronic data interchange capabili¬ ties with the plant’s major suppliers, and (3) in-house facilities for electronic fund transfers.

a. As technology changes, why should managers update ordering policies for inventory?

b. Write a memo to the plant manager describing the likely impact of the changes made in this plant on the EOQ of material input.LO.1