If there is no safety stock, the average level of inventory will be one-half of the economic order quantity. For example, if the EOQ is 500, the basic model predicts that the average inventory level will be 250. The company will have 500 units immediately after a purchase and zero immediately before the receipt of the next purchase replenishment is assumed to be instantaneous). However, safety stock increases the average inventory level by the amount of the safety stock. The modified EOQ model assumes that safety stock will never be used.
Thus, if a safety stock of 100 is carried by the company in the example, the average inventory level will increase to 350. Inventory will be 600 units immediately upon receipt of a purchase and 100 units immediately before the receipt of the next purchase.

Herzberg's Two-Factor Theory of Motivation identifies two categories of workplace factors:
Hygiene Factors - Prevent dissatisfaction but do not create motivation (e.g., salary, job security, work conditions).
Motivational Factors - Lead to job satisfaction and motivation (e.g., achievement, responsibility, advancement, recognition).
(A) Salary and status. # Incorrect.
Salary is a hygiene factor, meaning it prevents dissatisfaction but does not directly drive job satisfaction.
Status is also not a strong motivator under Herzberg's theory.
(B) Responsibility and advancement. # Correct.
These are motivational factors in Herzberg's theory.
Employees feel satisfied when they have responsibility, career growth, and promotion opportunities.
IIA GTAG "Auditing Human Resource Management" highlights career development as a key driver of employee motivation and retention.
(C) Work conditions and security. # Incorrect.
These are hygiene factors, which help avoid dissatisfaction but do not actively motivate employees.
(D) Peer relationships and personal life. # Incorrect.
Good relationships with coworkers help, but they are not primary motivators under Herzberg's theory.
IIA GTAG - "Auditing Human Resource Management"
IIA Standard 2110 - Governance (Employee Motivation & Engagement)
Herzberg's Two-Factor Theory of Motivation (Workplace Psychology Research) Analysis of Answer Choices:IIA References:Thus, the correct answer is B, as responsibility and advancement are the key motivational factors leading to employee satisfaction.

The EOQ minimizes the sum of carrying and setup costs. The EOQ is the amount at which carrying costs are equal to setup casts. Thus, plugging the data into the EOQ formula results in the following:

Thus, if each lot consists of 1,000 units, five production runs per year are needed to meet the 5,000-unit demand. At this level, setup costs will total US $5,000 5 x $1,000). Carrying costs will also equal US $5,000 10 per unit carrying cost average inventory of 500 units).
Accordingly, total costs are minimized at US $10,000. Jed Ryerson Computer Furniture, Inc. RCF) manufactures a line of office computer chairs. The annual demand for the chairs is estimated to be 5,000 units. The annual cost tic. hold one unit in inventory is US $10 per year, and the cost to initiate a production run is US $1,000. There are no computer chairs on hand, and RCF has scheduled four equal production runs of computer chairs for the coming year, the first of which is to be run immediately. RCF has 250 business days per year, sales occur uniformly throughout the year, and production start-up is within one day. RCF is considering using the following formula for determining the economic order quantity EOQ):

If: A = cast to initiate a production run per purchase order D = annual unit demand K = cost of carrying one unit per year

Reference: IIA Business Knowledge for Internal Auditing, Performance Management section.