Which One of the Following Statements Regarding the Economic Order

question 89

Multiple Choice

Which one of the following statements regarding the economic order quantity (EOQ) is True?

• A) The EOQ model combines several different item orders to the same supplier.
• B) If an order quantity is larger than the EOQ, the annual holding cost for cycle inventory exceeds the annual ordering cost.
• C) The EOQ model assumes a variable demand pattern.
• D) When the interest rate drops, the inventory holding cost decreases and the EOQ decreases.

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Definitions:

Commingled

Commingled refers to the mixing of assets or funds belonging to different parties such that they cannot be distinguished from one another.

Confusion

The act of mingling or blending goods or property in such a way that they can no longer be distinguished; in legal terms, it can affect rights of ownership.

Negotiable Document of Title

A document guaranteeing the possession and control of goods, which can be transferred to another party to facilitate commerce.

Legal Title

The formal right of ownership of property, which may or may not include the right to use or occupy the property.