Figure 7-1 Use the Graph Below to Answer the Question(s)

question 38

Multiple Choice

Figure 7-1
Use the graph below to answer the question(s) .

-If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the model,the average amount of inventory on hand

• A) is zero
• B) is affected by the amount of product cost
• C) is one-half of the economic order quantity
• D) is smaller than the holding cost per unit
• E) cannot be determined from the given information

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Definitions:

Net Float

The difference between checks written against and deposited in an account, not yet cleared by the financial institution.

Cash Inflows

Money received by a business from its various activities, including sales, financing, and investments, contributing to its net cash flow.

Lockbox Systems

A service offered by banks to companies for the receipt of payment from customers, involving the use of specially designed lockboxes to speed up collections.

Lockbox Plan

A banking service that speeds up collection and processing of company receipts by having those payments mailed directly to a location accessible by the bank.