(Impact of technology or ordering) A plant manager and her controller were dis¬ cussing the plant’s inventory control policies one day. The controller suggested to the plant manager that the ordering policies needed to be reviewed because of new technology that had been put in place in the plant’s purchasing de¬ partment. Among the changes that had been implemented in the plant were (1) installation of computerized inventory tracking, (2) installation of electronic data interchange capabilities with the plant’s major suppliers, and (3) installa¬ tion of 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?