Increases in the Carrying Cost and Decreases in the Ordering

question 90

Multiple Choice

Increases in the carrying cost and decreases in the ordering cost per purchase order result in ________.

• A) smaller EOQ amounts
• B) larger EOQ amounts
• C) larger relevant total costs
• D) smaller relevant total costs

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Definitions:

Short-Term Financing

Funding obtained for a period of one year or less, used to cover immediate needs such as working capital requirements.

Minimum Denomination

The smallest unit of value in which a security or financial instrument can be issued or traded.

Net Worth

The difference between an individual or household’s assets and liabilities.

Revenue Bond

A type of bond issued by municipalities or government entities, backed by specific revenue sources rather than the issuer's full faith and credit.