The Primary Purpose of the Basic Economic Order Quantity Model

question 10

Multiple Choice

The primary purpose of the basic economic order quantity model is

• A)to calculate the reorder point,so that replenishments take place at the proper time
• B)to minimize the sum of carrying cost and holding cost
• C)to maximize the customer service level
• D)to minimize the sum of setup cost and holding cost
• E)to calculate the optimum safety stock

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Definitions:

Promotional Goals

Promotional Goals are the objectives a company aims to achieve through its marketing communication efforts, such as increasing brand awareness, generating sales, or enhancing brand image.

Pricing Services

The process of determining the price at which services will be offered to customers, considering cost, value, demand, and competition.

Yield Management Systems

Systems used by companies, especially in the hospitality and airline industries, to adjust prices and availability of products or services in response to market demand, maximizing revenue.

Capacity Utilization

Refers to the percentage of total production capacity that is actually being used by a company over a specific period.