Carter Company Orders 250 Units at a Time, and Places

question 103

Multiple Choice

Carter Company orders 250 units at a time, and places 15 orders per year. Total ordering cost is $1,100 and total carrying cost is $1,750. Which of the following statements is true?

• A) The economic order quantity (EOQ) is 250.
• B) The economic order quantity (EOQ) is more than 250.
• C) The economic order quantity (EOQ) is less than 250.
• D) Total inventory-related cost is lower than it would be at the economic order quantity (EOQ).
• E) None of these.

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Definitions:

Decomposition

The process by which organic substances are broken down into simpler matter, an essential component of nutrient cycling in ecosystems.

Nutrient-poor

Describes soils or ecosystems that lack sufficient quantities of essential nutrients required for plant growth, resulting in limited vegetative productivity.

Broadleaf Trees

Trees characterized by broad, flat leaves that are shed annually, contrast to coniferous or needle-leaved trees.

Pollination

The transfer of pollen from the male part of a plant to the female part, enabling fertilization and the production of seeds.