In the EOQ Model,the Optimal Order Quantity Is the Amount

question 35

Multiple Choice

In the EOQ model,the optimal order quantity is the amount at which ______.

• A)the total annual ordering costs are at a minimum
• B)the total holding costs are at a minimum
• C)the sum of the total annual ordering costs and the total annual holding costs is at a minimum
• D)the difference between the total annual ordering costs and the total annual holding costs is at a maximum

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Definitions:

Payments

The act of transferring money to fulfill an obligation, such as in purchasing goods or services or repaying a loan.

Penalty

A punishment imposed for breaking a law, rule, or contract, which often involves paying a fine or forfeiting something.

Mark-Up

The amount added to the cost of a product or service to cover overhead and profit.

Selling Price

The amount of money for which a product is sold to the customer, after accounting for discounts, rebates, and other adjustments.