Consider the Relationship Between Optimal Lot Size and Set-Up Cost

question 12

Multiple Choice

Consider the relationship between optimal lot size and set-up cost. Other things remaining the same, as the setup cost decreases,

• A) holding cost will increase.
• B) optimal production batch size will increase.
• C) optimal production batch size will decrease.
• D) optimal production batch size will stay the same.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Bank Borrowings

Funds that have been obtained from a bank through various types of loans.

Cash Management

The practice of collecting, managing, and investing cash in a way that meets the financial objectives of the organization.

Financing Activities

Transactions involving raising capital or repaying funds to owners and creditors, reflected in a firm's cash flow.