Which of the Following Is True of the EOQ Model

question 26

Multiple Choice

Which of the following is true of the EOQ model? Note that the optimal order quantity, Q, will be called EOQ.

• A) If the fixed per order cost increases by 20%, then EOQ will increase by 20%
• B) If the annual sales, in units, increases by 20%, then EOQ will increase by 20%.
• C) If the average inventory increases by 20%, then the total carrying costs will increase by 20%.
• D) If the average inventory increases by 20% the total order costs will increase by 20%.
• E) None of the above is true.

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Definitions:

Rational Relationship Test

A standard of review used by courts to evaluate the constitutionality of laws, ensuring that the law has a reasonable relation to a legitimate government purpose.

Economic Regulation

Government-imposed restrictions and controls on economic activities and industries to correct market failures and promote the public interest.

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Publishing false information about someone with knowledge of its falsity or with reckless disregard for the truth, especially in defamation law.

Defamation Cases

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