What Will Be the Effect on Total Ordering Costs (Calculated

question 2

Multiple Choice

What will be the effect on total ordering costs (calculated over multiple orders) in an inventory system as the size of each order increases?

• A)It will increase
• B)It will decrease
• C)It will remain unchanged
• D)Order size has no effect on ordering costs.

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Definitions:

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, assets, equity, and other factors.

Comprehensive Income

Represents the total change in equity for a business enterprise during a period from transactions and other events from non-owner sources.

Unrealized Loss

A loss that results from holding onto an asset that has decreased in value, but has not actually been sold yet.

Available-For-Sale Securities

Financial assets that are purchased with the intent to sell before their maturity date, and not held to maturity or traded actively.