The efficiency of an inventory system is often measured by the turnover ratio.(TR), defined by TR =

Question:

The efficiency of an inventory system is often measured by the turnover ratio.(TR), defined by TR = Cost of goods sold per year / Average value of on hand inventory

a. Does a high turnover ratio indicate an efficient inventory system?

b. If the EOQ model is being used, determine TR in terms of K, D, h, and Q.

c. Suppose that D increases. Show that TR will also increase. Does this make intuitive sense?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Practical Management Science

ISBN: 1497

5th Edition

Authors: Wayne L. Winston, Christian Albright

Question Posted: