The first major business activity in the expenditure cycle is ordering inventory and supplies.The traditional approach to management of inventory to ensure sufficient inventory to maintain production is known as

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Economic order quantity is a traditional approach to inventory management that aims to minimize inventory costs by determining the optimal quantity of inventory to order at any given time. This approach takes into account factors such as demand, ordering costs, and carrying costs to ensure that inventory levels are sufficient to meet production needs while also minimizing the cost of holding excess inventory. Safety stock and just-in-time production are alternative approaches to inventory management that prioritize minimizing stockouts and reducing inventory holding costs, respectively. Optimal inventory quantity is not a commonly used term in inventory management.

The First Major Business Activity in the Expenditure Cycle Is