Given the Same Demand, Setup/ordering Costs, and Carrying Costs, the EPQ

question 121

Multiple Choice

Given the same demand, setup/ordering costs, and carrying costs, the EPQ calculated using incremental replenishment will be ____________ if instantaneous replenishment was assumed.

• A)greater than the EOQ
• B)equal to the EOQ
• C)smaller than the EOQ
• D)greater than or equal to the EOQ
• E)smaller than or equal to the EOQ

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Definitions:

Operating Profit

Earnings before interest and taxes, calculated by subtracting operating expenses from gross profit.

Mark-up

The difference between the cost of a good or service and its selling price, expressed as a percentage over the cost.

Unit Cost

The expense associated with creating, storing, or purchasing a single unit of a product or service.

Retail Prices

The price at which goods and services are sold to the final consumer for personal use.