Chapter 5 Day 2 Spring 2010 Revised

Chapter 5 Day 2 Spring 2010 Revised - Chapter 5 Day 2 (Feb....

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Unformatted text preview: Chapter 5 Day 2 (Feb. 24 th ) Strategic Planning Regarding Operating Processes 5-1 5-2 Learning Objectives Describe the process and strategies of determining selling price. Explain the process of determining the inventory model and demonstrate the EOQ and JIT models. Discuss and calculate compensation packages. 5-3 What are the Common Reasons for Holding Inventory? Meet customer demand Smooth production scheduling Take advantage of quantity discounts Hedge against anticipated cost increases 5-4 What are the Common Reasons for Not Holding Inventory? Significant costs are incurred Holding inventory allows the company the hide its internal process problems because demand can be met from inventory 5-5 Balancing Act Ordering Costs Holding Costs 5-6 What is the Difference between EOQ and JIT? EOQ Short-term model Minimizes incremental ordering and holding costs JIT Long-term philosophy Assumes product-sustaining and facility- sustaining costs are relevant 5-7...
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This note was uploaded on 04/18/2010 for the course ACCT 12995 taught by Professor Krisj.clark during the Spring '10 term at Georgia State University, Atlanta.

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Chapter 5 Day 2 Spring 2010 Revised - Chapter 5 Day 2 (Feb....

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