Which of the Following Statements Is True of the The Economic

question 53

Multiple Choice

Which of the following statements is true of the the economic order quantity decision model?

• A) The economic order quantity increases with higher demand and higher carrying costs and decreases with higher ordering costs.
• B) The simplest version of the economic order quantity model assumes there are only ordering costs, carrying costs, stockout costs, and purchasing costs.
• C) It assumes the purchase order lead time is not known with certainty.
• D) The larger the order quantity, the lower the annual relevant ordering costs and the higher the annual relevant carrying costs.

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