WGU- C720 Operational Strategies and Inventory Management Mastery:
Economic Order Quantity (EOQ), Economic Production Quantity (EPQ), Quantity
Discount Models (QDM), Holding and Carrying Costs, Reserve Capacity, Vendor
Managed Inventory (VMI), Available-to-Promise, Pipeline Inventory,
Independent and Dependent Demand, Seasonal and Peak Demand, Chase
Strategies, Safety Stock, Stock-outs, Service Levels, SWOT Analysis, Operations
Productivity, Labor Efficiency, Periodic vs Perpetual Inventory Systems, ABC
Analysis, Pareto Principle, Competitive Advantage, Relative Advantage,
Teamwork and VIRAL Framework, Benchmarking, Mass Customization,
Employee Empowerment, Total Quality Management (TQM), Quality Function
Deployment (QFD), Service Quality Dimensions, Cost of Quality (Failure,
Appraisal, Prevention), PDCA Cycle, Deming’s 14 Points, Ishikawa Fishbone
Diagram, Statistical Process Control (SPC), Seven Quality Tools, Six Sigma
(DMAIC, DMADV) Exam Questions Verified and Provided with Complete A+
Graded Rationales Latest Updated 2026
Operational Stategies
Module 1,2,12,
16 - Questions
Main Objectives: how a business achieves organizational goals &
competitive advantage through operations & inventory
management
Inventory Models
,EOQ
EPQ
QDM
(Purpose of EOQ and EPQ is to minimus costs of ordering/
holding inventory
Holding/Carrying Costs
The costs of holding inventory; includes costs for storage space, interest paid on borrowed
money to finance the inventory, and any losses incurred due to damage or obsolescence.
Economic Order Quantity (EOQ)
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
EOQ = intersection point where total annual variable costs for holding and ordering inventory
coincide.
Economic Production Quantity (EPQ)
, 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*
Quantity discount Model (QDM)/ Transportation discounts
A discount offered in price for ordering above a specified amount
discount offered on shipping costs for ordering above a specified amount
Revenue Sharing
When 2+ companies partner and divides the profits received based on an agreement between
all parties involved.
Reserve Capacity
When a company stores, or pays another company to store, excess inventory to be used for
unexpected demand
Key Processes
Organizations must have:
a. Strategy development
Economic Order Quantity (EOQ), Economic Production Quantity (EPQ), Quantity
Discount Models (QDM), Holding and Carrying Costs, Reserve Capacity, Vendor
Managed Inventory (VMI), Available-to-Promise, Pipeline Inventory,
Independent and Dependent Demand, Seasonal and Peak Demand, Chase
Strategies, Safety Stock, Stock-outs, Service Levels, SWOT Analysis, Operations
Productivity, Labor Efficiency, Periodic vs Perpetual Inventory Systems, ABC
Analysis, Pareto Principle, Competitive Advantage, Relative Advantage,
Teamwork and VIRAL Framework, Benchmarking, Mass Customization,
Employee Empowerment, Total Quality Management (TQM), Quality Function
Deployment (QFD), Service Quality Dimensions, Cost of Quality (Failure,
Appraisal, Prevention), PDCA Cycle, Deming’s 14 Points, Ishikawa Fishbone
Diagram, Statistical Process Control (SPC), Seven Quality Tools, Six Sigma
(DMAIC, DMADV) Exam Questions Verified and Provided with Complete A+
Graded Rationales Latest Updated 2026
Operational Stategies
Module 1,2,12,
16 - Questions
Main Objectives: how a business achieves organizational goals &
competitive advantage through operations & inventory
management
Inventory Models
,EOQ
EPQ
QDM
(Purpose of EOQ and EPQ is to minimus costs of ordering/
holding inventory
Holding/Carrying Costs
The costs of holding inventory; includes costs for storage space, interest paid on borrowed
money to finance the inventory, and any losses incurred due to damage or obsolescence.
Economic Order Quantity (EOQ)
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
EOQ = intersection point where total annual variable costs for holding and ordering inventory
coincide.
Economic Production Quantity (EPQ)
, 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*
Quantity discount Model (QDM)/ Transportation discounts
A discount offered in price for ordering above a specified amount
discount offered on shipping costs for ordering above a specified amount
Revenue Sharing
When 2+ companies partner and divides the profits received based on an agreement between
all parties involved.
Reserve Capacity
When a company stores, or pays another company to store, excess inventory to be used for
unexpected demand
Key Processes
Organizations must have:
a. Strategy development
