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Compensating Balances
Minimum balances that a business must maintain in its bank account as part of a borrowing arrangement with the bank.
Precautionary Balances
Cash balances held in reserve for random, unforeseen fluctuations in cash inflows and outflows.
EOQ Model
Economic Order Quantity, an inventory management model that determines the optimal order quantity to minimize total inventory costs, including holding and ordering costs.
Safety Stock
A level of extra inventory maintained to mitigate the risk of stockouts caused by variations in supply and demand.
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