Which of the Following Is True of the EOQ Model

question 1

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) The EOC is the same for all comppanies.

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Definitions:

World Depression

A worldwide economic downturn, most notably the Great Depression of the 1930s, which had profound effects on global economies and societies.

Federal Government

The central authority of the United States, composed of the legislative, executive, and judicial branches, responsible for governing the country at a national level.

African-Americans

Citizens of the United States with total or partial ancestry from any of the black racial groups of Africa.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s, designed to help the country recover from the Great Depression.