Student
62 Points
Joined June 2012
I think i have misinterpreted a sentence- " the lower the inventory level we want, the higher the cost to carry, the better." This is what i have found written in a few books, kindly explain what's the meaning?
2nd question is- while computing total carrying cost i don't understand what is the logic behind dividing the number of items supplied in one order by 2 & then multiplying it by carrying cost p.u p.a...what i mean is why don't we simply multiply the total number of units supplied p.a by carrying cost p.u p.a?