The correct answer is: A. Optimum Cash Balance
The Miller-Orr model is a financial model that helps businesses determine the optimal level of cash to hold. The model takes into account the costs of carrying cash, the costs of running out of cash, and the uncertainty of cash flows.
The model works by setting two levels for cash: a target level and a safety level. The target level is the desired level of cash to hold, while the safety level is the minimum level of cash that the business must have on hand. The model then generates a series of orders to buy or sell cash, based on the difference between the actual cash balance and the target level.
The Miller-Orr model is a useful tool for businesses that want to manage their cash effectively. The model can help businesses avoid the costs of carrying too much cash, while also ensuring that they have enough cash on hand to meet their obligations.
The other options are incorrect because the Miller-Orr model does not deal with optimum finished goods or optimum receivables.