8. Which factor influences buying decisions?

A. Delivered purchased material cost
B. Incremental managerial costs
C. Receiving and inspection costs
D. Incremental cost of capital

9. Under which of the following analyses is an inventory classified according to its scarcity or availability?

A. VED analysis
B. SDE analysis
C. HML analysis
D. FSND analysis

10. Which of the following is not a defining element of the term "inventory"?

A. It is an idle resource that possesses economic value.
B. It ties up resources of the organization.
C. It serves the purpose of decomposing successive operations.
D. It is multimodal.

Inventory management plays a crucial role in the decision-making process of a firm, influencing factors like purchasing costs, capital allocation, and inventory classification based on scarcity.

One method for classifying inventory based on scarcity is the VED analysis, which categorizes inventory as vital (V), essential (E), or desirable (D) to help manage inventory efficiently.

Understanding the defining elements of inventory, such as economic value, resource utilization, and operational impact, is essential for effective inventory management within organizations.

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