Which of the Following Is a Dynamic Lot-Sizing Technique That

question 38

Multiple Choice

Which of the following is a dynamic lot-sizing technique that calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot in which these are most nearly equal?

• A) Economic order quantity
• B) Lot-for-lot
• C) Least total cost
• D) Least unit cost
• E) ABC analysis

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, over a specified period.

High-Low Method

A technique in managerial accounting used to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and the associated costs.

Variable Cost

Expenses that change in proportion to the activity of a business such as raw materials and direct labor costs.

Fixed Cost

Payments that do not vary with the amount of production or sales activities, including costs like renting spaces, salary payouts, and insurance contributions.