Which of the Following Statements Is True of the The Economic

question 53

Multiple Choice

Which of the following statements is true of the the economic order quantity decision model?

• A) The economic order quantity increases with higher demand and higher carrying costs and decreases with higher ordering costs.
• B) The simplest version of the economic order quantity model assumes there are only ordering costs, carrying costs, stockout costs, and purchasing costs.
• C) It assumes the purchase order lead time is not known with certainty.
• D) The larger the order quantity, the lower the annual relevant ordering costs and the higher the annual relevant carrying costs.

---

Definitions:

Reasonable Amount

A quantity or level of something (such as time, cost, or size) that is considered fair, proper, and appropriate under typical circumstances.

Express Terms

Specific provisions or conditions explicitly stated in a contract or agreement.

Past Course

A historical pattern of behavior or performance that may be considered in evaluating the current situation or deciding on future actions.

Conflict

Disagreement or discord resulting from opposing actions, views, or interests between parties.