In the EPQ Model,given That Q Is the Optimal Production

question 32

Multiple Choice

In the EPQ model,given that Q is the optimal production quantity,d is the demand rate,p is the production rate,and H is the holding cost per unit per year,the total annual holding cost equation is given by ______.

• A)[Q/2 × ((d-p)/p)]
• B)[Q × ((p-d)/p)] × H
• C)[Q/2 × ((p-d)/p)] × H
• D)Q/2 x H

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Definitions:

Operating Expense

Costs associated with the day-to-day functioning of a business, excluding production costs but including items like rent, utilities, and salaries.

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of taxes and interest.

Mark-up

The amount added to the cost price of goods to cover overhead and profit; typically expressed as a percentage of the cost.

Unit Cost

Unit cost is the total expense incurred to produce, store, and sell one unit of a product or service, including both fixed and variable costs.