Which of These Statements About the Production Order Quantity Model

question 167

Multiple Choice

Which of these statements about the production order quantity model is FALSE?

• A) The production order quantity model is appropriate when the assumptions of the basic EOQ model are met, except that receipt is noninstantaneous.
• B) Because receipt is noninstantaneous, some units are used immediately and not stored in inventory.
• C) Average inventory is more than one-half of the production order quantity.
• D) All else equal, the smaller the ratio of demand rate to production rate, the smaller is the production order quantity.
• E) None of these is false.

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