Miller-Orr model is used in the management of

Correct option is D

The Miller-Orr model is a cash management tool used to optimize a firm's cash balance. It determines the upper limit, lower limit, and target cash balance, ensuring that a firm maintains adequate cash for operations while minimizing holding costs.
Information Booster:
· The Miller-Orr model assumes that cash flows are random and provides a practical framework for managing cash under uncertainty.
· It helps balance transaction costs (from transferring cash) and opportunity costs (from holding excess cash).
Additional Knowledge:
· (a) Inventory: Inventory management is addressed by models like EOQ and ABC analysis, not Miller-Orr.
· (b) Leverage: Relates to debt-equity decisions, not cash management.
· (c) Receivables: Managed using credit policies and aging schedules, not the Miller-Orr model.