Which of the Following Statements Is Correct

question 7

Multiple Choice

Which of the following statements is correct?

• A) Economic order quantity is the quantity at which the annual inventory holding cost is equal to the annual ordering cost
• B) Economic order quantity is the quantity at which annual inventory holding cost has been maximized
• C) Economic order quantity is the quantity at which annual inventory ordering costs is minimized
• D) Economic order quantity is the amount at which inventory costs are offset by sales

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Definitions:

Respondeat Superior

A legal doctrine holding an employer or principal legally responsible for the wrongful actions of an employee or agent, if such actions occur within the scope of employment or representation.

Implied Authority

The power of an agent to perform acts which are reasonably necessary to accomplish the purpose of an organization.

Express Authority

The power explicitly given to an agent or representative through a contract or agreement to perform certain actions.

Agent

An individual or entity authorized to act on behalf of another (the principal) in dealings with third parties.