E&OE Is Trying to Minimize Its Inventory Costs, Which Are

question 132

Multiple Choice

E&OE is trying to minimize its inventory costs, which are extremely high. The company has realized that it can achieve this by maintaining a near-zero inventory and producing more only once a product is ordered. Which of the following is true for E&OE?

• A) Inventory costs are lower than order-processing costs.
• B) Running costs are higher than inventory-carrying costs.
• C) Setup costs for the products are low.
• D) Order-processing costs are high.
• E) Order-processing costs are lower than setup costs.

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