A perpetual inventory system uses a minimum quantity on hand to initiate purchase ordering procedures for restocking. In reviewing the appropriateness of the minimum quantity level established by the stores department, the internal auditor is least likely to consider
A. Stockout costs, including lost customers.
B. Seasonal variations in forecasting inventory demand.
C. Optimal order sizes determined by the economic order quantities model.
D. Available storage space and potential obsolescence.
Answer:C
A perpetual inventory system uses a minimum quantity on hand to initiate purchase ordering procedures for restocking. In reviewing the appropriateness of the minimum quantity level established by the stores department, the internal auditor is least likely to consider
A. Stockout costs, including lost customers. B. Seasonal variations in forecasting inventory demand. C. Optimal order sizes determined by the economic order quantities model. D. Available storage space and potential obsolescence.