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Homework answers / question archive / Seismic Testing is involved in the business of testing subterranean areas for the presence of oil and other minerals

Seismic Testing is involved in the business of testing subterranean areas for the presence of oil and other minerals

Business

Seismic Testing is involved in the business of testing subterranean areas for the presence of oil and other minerals. In its business, it uses a highly specialized and very dangerous explosive to generate the subterranean sound ways that it interprets to determine what is underground in a specific area. Because the explosive it uses is so specialized and difficult to obtain, it keeps a large supply of the explosive on hand.

1) What are the costs that Seismic Testing incurs in maintaining a large inventory of the explosive?

2) How might it reduce its inventory carrying costs?

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