Which of the Following Is Not One of the Assumptions

question 157

Multiple Choice

Which of the following is not one of the assumptions of the basic EOQ model?

• A)Annual demand requirements are known and constant.
• B)Lead time does not vary.
• C)Each order is received in a single delivery.
• D)Quantity discounts are available.
• E)All of the above are necessary assumptions.

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Definitions:

Covariance of Returns

A measure used in finance to assess how two investments move in relation to each other over a period.

Correlation Coefficient

A statistical measure that calculates the strength and direction of the relationship between two variables or assets.

Diversification

A risk management technique that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance.

Negatively Correlated

Refers to two variables that move in opposite directions, meaning when one variable increases, the other decreases, and vice versa.