Which of the Following Is an Assumption of the Economic

question 25

Multiple Choice

Which of the following is an assumption of the economic order quantity model?

• A)Lead time for the receipt of orders is constant and known.
• B)Quantity (or volume)discounts are available.
• C)Multiple products are involved.
• D)Demand is not known.

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Definitions:

Compounded Annually

Describes interest on an investment or loan calculated once a year on both the initial principal and the accumulated interest from previous periods.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, reflecting the time value of money.

Cash Equivalent Price

The value of an asset that is readily convertible into a known amount of cash with negligible risk of changes in value.

Acquisition Date

The specific date on which an acquisition or takeover of one entity by another is officially completed.