Which One of the Following Statements Concerning the Economic Order

question 7

Multiple Choice

Which one of the following statements concerning the economic order quantity (EOQ) model is not true when the unit holding cost increases?

• A)the economic order quantity will decrease
• B)the number of orders per year will decrease
• C)total ordering cost will increase
• D)average inventory will decrease

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Definitions:

Edgeworth Box

A diagram used in economics to show the distribution of resources and the potential for Pareto improvements within an exchange economy.

Behavioral Economists

Economists who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

Preferences

The subjective tastes or desires of individuals, affecting their choices among various goods, services, or outcomes.

Discovered

Found or identified after a search, exploration, or investigation, often implying that the object or information was previously unknown or hidden.