While Working a Simple EOQ Problem, You Notice That, with a Certain

question 18

Multiple Choice

While working a simple EOQ problem, you notice that, with a certain lot size, the annual ordering cost is exactly the same value as the annual inventory carrying cost. Which of the following is true?

• A) the lot size is the economic order quantity
• B) total cost is at its maximum
• C) the annual carrying cost will decrease if the order quantity is increased
• D) all of the above
• E) none of the above; the phenomenon is merely a coincidence

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Definitions:

Court's Decision

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Holding

The binding legal principle, or precedent, that is drawn from the court’s decision in a case.

Appellate Court

A higher court that reviews the decisions and outcomes of lower courts to ensure that the law was correctly applied and justice was properly administered.

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