Amazon must carry inventory to meet demand from its customers. If the item is not in inventory the customer may go elsewhere to source the item whether it is a raw material or final product. Amazon's finance managers are concerned about carrying too much inventory as they borrow money to finance the inventory on hand which can prove to be expensive. Management therefore spends a considerable amount of time evaluating: a. the demand for its products over the next period.
b. the costs associated with holding a sufficient amount of inventory-both financing, storage, transportation and other costs the costs associated with not having enough inventory to satisfy customer demand
c. the EOQ model or economic ordering quality model to determine the optimal amount of inventory to maintain.
d. all of the above.
e. none of the above.