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Organizational strategies vary in two ways,depending on
Short-term Financial Policy
Guidelines or strategies focused on managing a company's current assets and liabilities to ensure short-term operational needs are met.
Carrying Costs
Expenses associated with holding inventory, including storage, insurance, and opportunity cost of tied-up capital.
Shortage Costs
Costs incurred from not having enough inventory on hand, including lost sales and emergency shipping expenses.
Order Costs
Expenses related to placing and receiving orders for inventory, including costs associated with ordering, shipping, and handling.
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