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Overstocking, on the other hand, unnecessarily ties up funds that might be made more productive elsewhere. Although overstocking may appear to be the lesser of the two evils, the price tag for excessive overstocking can be staggering when inventory holding costs are high and matters can easily get out of hand...
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Add to this the limited shelf life of perishable goods and things get really complicated. The two fundamental decisions that must be made and planned for pertain to the timing and size of orders. As far as inventory management is concerned, when to order and how much is just as important as what is being ordered...
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