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A short-run challenge for a business is maintaining a competitive position.
Carrying Cost
The total cost associated with holding inventory, including storage, insurance, taxes, depreciation, and opportunity costs, among others.
Setup Cost
The expenses incurred in preparing equipment or processes for manufacturing an order or batch of products.
Annual Demand
The total quantity of a product or service that consumers are willing and able to purchase over a year.
Safety Stock
Additional quantity of an item held in inventory to reduce the risk of stockouts caused by variability in supply or demand.
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