If the EOQ Is Ordered, Which of the Following Is

question 68

Multiple Choice

If the EOQ is ordered, which of the following is true?

• A) Annual ordering cost exceeds annual holding cost.
• B) Annual holding cost exceeds annual ordering cost.
• C) Annual ordering cost is equal to annual holding cost.
• D) The sum of annual ordering cost plus annual holding cost is maximized.
• E) The annual holding cost curve is decreasing.

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Definitions:

Work in Process Inventory

Goods that are in the process of being manufactured but are not yet complete.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been purchased by customers.

Perfection Standard

A benchmark for achieving the highest possible performance or outcome in a given task or process, often unattainable but used as a goal to strive for.

Skilled Worker

An individual who has specialized training and expertise in a particular trade or profession, often requiring formal education or certification.