Which of the Following Is True of the EOQ Model?Note

question 21

Multiple Choice

Which of the following is true of the EOQ model?Note that the optimal order quantity, Q, will be called EOQ.

• A) if the annual sales, in units, increases by 20%, then eoq will increase by 20%.
• B) if the average inventory increases by 20%, then the total carrying costs will increase by 20%.
• C) if the average inventory increases by 20% the total order costs will increase by 20%.
• D) the eoc is the same for all companies.
• E) if the fixed per order cost increases by 20%, then eoq will increase by 20%.

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Definitions:

Strategic Management

The process of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Future Planning

The process of setting goals and outlining strategies and actions to achieve those goals, considering predictions about future conditions and challenges.

Unrelated Diversification

A growth strategy where a business expands into areas that are different from its core operations.

Business Areas

are distinct segments within a company, focusing on specific tasks or markets, such as finance, marketing, or product development.