Which of the Following Is an Assumption of the Basic

question 60

Multiple Choice

Which of the following is an assumption of the basic EOQ model?

• A) Lead time is unknown.
• B) Demand may be seasonal.
• C) Orders arrive at once (in one lot).
• D) Quantity discounts are considered.
• E) Lost sales are allowed, but not back orders.

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Definitions:

Debts Owed

Amounts of money that are required to be repaid by an individual or organization to creditors.

Drawing Account

A specific account used to record amounts withdrawn by the owner(s) of a business for personal use.

Withdrawals

Amounts taken from a business by its owner(s) for personal use.

Expenses

Costs incurred by a business in the process of earning revenue.