What Is the Average Inventory Level, Based on EOQ, for a Firm

question 7

Multiple Choice

What is the average inventory level, based on EOQ, for a firm that has annual sales of 2,500 units, costs per order of $45, and carrying costs of $5 per unit?

• A)35
• B)75
• C)106
• D)237

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Definitions:

Licensing

A trade agreement in which one company—the licensor—allows another company—the licensee—to use its company name, products, patents, brands, trade marks, raw materials, and/or production processes in exchange for a fee or royalty.

International Marketplace

A global economic environment that enables companies to buy and sell goods and services across national borders, subject to regulations and policies of the involved countries.