In the EOQ Model,carrying Costs of Inventory Include

question 131

Multiple Choice

In the EOQ model,carrying costs of inventory include

• A) the required rate of return on inventory.
• B) wages for warehouse workers.
• C) costs associated with inventory shrinkage.
• D) B and C.
• E) all of the above.

---

Definitions:

Consumer Surplus

The difference in the total funds consumers are prepared to allocate for a good or service against the total funds they genuinely allocate.

Consumer Surplus

The contrast in the total money consumers are willing to shell out for a good or service versus what they truly pay.

Speculative Demand

Demand driven not by the direct benefits one obtains from owning or consuming a good but instead by an expectation that the price of the good will increase.

Arc Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price, over a specific price range.