Describe briefly the A-B-C approach to inventory control.
13. The purchasing agent for a company that assembles and sells air-conditioning equipment in a
Latin American country noted that the cost of compressors has increased significantly each time
they have been reordered. The company uses an EOQ model to determine order size.
What are the
implications of this price escalation with respect to order size?
What factors other than price must
be taken into consideration?
