Which of the Following Is Not an Assumption of the Economic

question 108

Multiple Choice

Which of the following is not an assumption of the economic order quantity model shown below? Q? = $\sqrt { \frac { 2 \cdot D \cdot S } { H } }$

• A) Demand is known, constant, and independent.
• B) Lead time is known and constant.
• C) Quantity discounts are not possible.
• D) Production and use can occur simultaneously.
• E) The only variable costs are setup cost and holding (or carrying) cost.

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Definitions:

Factory Supervisor

An individual responsible for overseeing the day-to-day operations within a manufacturing facility, ensuring production targets and quality standards are met.

Machine Operator

A machine operator is a person who operates equipment and machinery in manufacturing or production settings, monitoring and controlling processes.

Variable Costing

An accounting method that only includes variable costs (costs that vary with production levels) in product costs and treats fixed costs as period costs expensed in the period incurred.

Manufacturing Margin

The difference between the sales revenues generated from manufactured goods and the cost of goods sold, indicating the profitability of production.