Newell and Company Is a Manufacturing Concern

Newell and Company is a manufacturing concern. The company divides its raw materials inventory into four classifications based upon the cost of each item. Based upon this system, Newell will:

A) Compute the EOQ for each group of items.
B) Incur more shortage costs on the less expensive items.
C) Order the more expensive items more frequently than the less expensive items.
D) Maintain a larger safety stock on the more expensive items.
E) Apply the JIT inventory approach to the less expensive items.