The Economic Order Quantity (EOQ)model Assumes That ______

question 55

Multiple Choice

The economic order quantity (EOQ) model assumes that ______.

• A)the unit purchase price of the item remains constant
• B)the unit purchase price of the item varies according to quantity ordered
• C)the total purchase costs of items ordered varies according to quantity ordered
• D)the average purchase costs of items ordered varies according to quantity ordered

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Definitions:

Cash Disbursements

Outflows of cash for expenses, investments, and other payments made by a business.

Materials Purchases

The acquisition of raw materials or supplies required for the production of goods or provision of services.

Payment Discount

A reduction in the invoice amount offered by a seller to the buyer in return for early payment within a specified time frame.

Cash Balance

The amount of cash on hand or in bank accounts, immediately available to a business or individual.