If Annual Demand Increases by 100%, the Average Inventory Held

question 75

Multiple Choice

If annual demand increases by 100%, the average inventory held in a system governed by the EOQ model is:

• A)increased 100%.
• B)decreased by 100%.
• C)decreased by 50%.
• D)increased by 40%.

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Definitions:

Costs Of Quality

The cost associated with controlling quality (prevention and appraisal) and failing to control quality (internal and external failure).

Prevention Costs

Expenditures made to avoid defects in products or inefficiencies in services, part of quality control measures.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing the product's value.

Value-Added

The enhancement a company gives its product or service before offering the product to customers.