Explain why inventory costs and inventory levels have declined relative to GDP over the last 20 years. Is this beneficial to the economy? Why or why not?

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After reading and reviewing this week’s text. Reflect and discuss the following questions:

Explain why inventory costs and inventory levels have declined relative to GDP over the last 20 years. Is this beneficial to the economy? Why or why not?

What are the major components of inventory carrying cost? How would you measure capital cost for making inventory policy decisions?

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How can inventory carrying cost be calculated for a specific product? What suggestions would you offer for determining the measure of product value to be used in this calculation?

Explain the differences between inventory carrying costs and ordering costs.

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