How might different functional areas of an organization have different inventory management objectives? How would you meet management's challenge of balancing inventory? What tools and/or theoretical formulas would you utilize? Explain why. How do you differentiate cycle, safety, pipeline, and speculative inventory? Why do we need to do so? What is inventory carrying cost? Explain the primary components. What is the tradeoff between inventory ordering and carrying cost? What are stock-out costs? How should you calculate the cost?

Solomon chemical company makes three products, b7, k6, and x9, which are joint products from the same materials. in a standard batch of 320,000 pounds of raw materials, the company generates 70,000 pounds of b7, 150,000 pounds of k6, and 100,000 pounds of x9. a standard batch costs $3,840,000 to produce. the sales prices per pound are $10, $14, and $20 for b7, k6, and x9, respectively. (a) allocate the joint product cost among the three final products using weight as the allocation base. (b) allocate the joint product cost among the three final products using market value as the allocation base. (c) allocate the joint product cost among the three final products using weight as the allocation base.