WGU- C720 Comprehensive 2026-2027 Frequently Tested Questions With
ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass!!Current Update!!
Operational Stategies Main Objectives: how a business achieves organizational
Module 1,2,12, goals & competitive advantage through operations & in-
16 - Questions ventory management
EOQ
EPQ
QDM
Inventory Models
(Purpose of EOQ and EPQ is to minimus costs of order-
ing/
holding inventory
The costs of holding inventory; includes costs for storage
space, interest paid on borrowed money to finance the
Holding/Carrying Costs
inventory, and any losses incurred due to damage or ob-
solescence.
costs for ordering/holding inventory per order
Finished goods
*Demand is known
*cost per unit not dependent on quantity
* Entire order delivered at once
when holding goes up, ordering goes down & vice-versa
Economic Order Quantity (EOQ)
EOQ = intersection point where total annual variable costs
for holding and ordering inventory coincide.
Economic Production Quantity (EPQ)
, WGU- C720 Comprehensive 2026-2027 Frequently Tested Questions With
ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass!!Current Update!!
A model that helps companies control the cost of ordering,
receiving, and holding inventory; this model allows for
incomplete inventory to arrive, thus proving useful for
businesses that produce their own parts; also known as
Production Order Quantity. RAW Materials
*Inventory is arriving into storage and sent out into a
production process*
A discount ottered in price for ordering above a specified
amount
Quantity discount Model (QDM)/ Transportation dis-
counts
discount ottered on shipping costs for ordering above a
specified amount
When 2+ companies partner and divides the profits re-
Revenue Sharing ceived based on an agreement between all parties in-
volved.
When a company stores, or pays another company to
Reserve Capacity
store, excess inventory to be used for unexpected demand
Organizations must have:
a. Strategy development
b. product development
Key Processes c. system development to produce services and goods
d. order fulfillment
to leverage impact
Market (Demand),
Primary Constraints in a System Process (throughput)
Product (Supply)
Types of Inventory/Demand
, WGU- C720 Comprehensive 2026-2027 Frequently Tested Questions With
ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass!!Current Update!!
Inventory
1. Raw materials - Parts, materials from suppliers
2. WIP - partly finished parts, components, subassemblies
or modules
3. Finished goods - Goods ready to ship to the customer
4. Replacement parts Inventory - for machinery or equip-
ment as those parts wear out.
5. Supplies - things to support the production process but
not the actual product
6. Transportation (pipeline) - shipped through distribu-
tion system
Vender Managed Inventory (VMI)
Available-to-Promise
Demand
1. Independent/Dependent
2. Dependent
3. Seasonal
4. Peak
5. Chase
6. Uneven/ Unexpected
When the vendor/supplier coordinates its own inventory
replenishment by receiving daily point-of-sale (POS) data
from retail stores.
Vender Managed Inventory (VMI)
Thus reducing costs and improving delivery performance
between the supplier and the retailer. -
Inventory that has not yet been sold. Used to determine
whether new orders can be accepted within given time
Available-to-promise period.
Customer orders booked - "on-hand inventory"
ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass!!Current Update!!
Operational Stategies Main Objectives: how a business achieves organizational
Module 1,2,12, goals & competitive advantage through operations & in-
16 - Questions ventory management
EOQ
EPQ
QDM
Inventory Models
(Purpose of EOQ and EPQ is to minimus costs of order-
ing/
holding inventory
The costs of holding inventory; includes costs for storage
space, interest paid on borrowed money to finance the
Holding/Carrying Costs
inventory, and any losses incurred due to damage or ob-
solescence.
costs for ordering/holding inventory per order
Finished goods
*Demand is known
*cost per unit not dependent on quantity
* Entire order delivered at once
when holding goes up, ordering goes down & vice-versa
Economic Order Quantity (EOQ)
EOQ = intersection point where total annual variable costs
for holding and ordering inventory coincide.
Economic Production Quantity (EPQ)
, WGU- C720 Comprehensive 2026-2027 Frequently Tested Questions With
ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass!!Current Update!!
A model that helps companies control the cost of ordering,
receiving, and holding inventory; this model allows for
incomplete inventory to arrive, thus proving useful for
businesses that produce their own parts; also known as
Production Order Quantity. RAW Materials
*Inventory is arriving into storage and sent out into a
production process*
A discount ottered in price for ordering above a specified
amount
Quantity discount Model (QDM)/ Transportation dis-
counts
discount ottered on shipping costs for ordering above a
specified amount
When 2+ companies partner and divides the profits re-
Revenue Sharing ceived based on an agreement between all parties in-
volved.
When a company stores, or pays another company to
Reserve Capacity
store, excess inventory to be used for unexpected demand
Organizations must have:
a. Strategy development
b. product development
Key Processes c. system development to produce services and goods
d. order fulfillment
to leverage impact
Market (Demand),
Primary Constraints in a System Process (throughput)
Product (Supply)
Types of Inventory/Demand
, WGU- C720 Comprehensive 2026-2027 Frequently Tested Questions With
ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass!!Current Update!!
Inventory
1. Raw materials - Parts, materials from suppliers
2. WIP - partly finished parts, components, subassemblies
or modules
3. Finished goods - Goods ready to ship to the customer
4. Replacement parts Inventory - for machinery or equip-
ment as those parts wear out.
5. Supplies - things to support the production process but
not the actual product
6. Transportation (pipeline) - shipped through distribu-
tion system
Vender Managed Inventory (VMI)
Available-to-Promise
Demand
1. Independent/Dependent
2. Dependent
3. Seasonal
4. Peak
5. Chase
6. Uneven/ Unexpected
When the vendor/supplier coordinates its own inventory
replenishment by receiving daily point-of-sale (POS) data
from retail stores.
Vender Managed Inventory (VMI)
Thus reducing costs and improving delivery performance
between the supplier and the retailer. -
Inventory that has not yet been sold. Used to determine
whether new orders can be accepted within given time
Available-to-promise period.
Customer orders booked - "on-hand inventory"
