If the Costs (S and H) and Demands (D) Are

question 43

Multiple Choice

If the costs (S and H) and demands (D) are the same, which of the following is true with regard to the EPQ model as compared to the EOQ model?

• A) The lot size under the EPQ model is bigger than under the EOQ model.
• B) The maximum inventory level is higher under the EPQ model than under the EOQ model.
• C) The two models use different formulas to compute annual ordering cost.
• D) The inventory depletion rate is not the same for both models.
• E) Both models use the same formula to compute annual holding cost.

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Definitions:

Intra-entity Transfer

Transactions involving assets, services, or funds between units or divisions within the same legal entity.

Consolidated Income Statement

A financial statement that presents the overall income of a corporation and its subsidiaries as a single entity.

Deferred

In finance, this term refers to transactions or events that are postponed to a future date.

Consolidated Worksheet

A tool used in the preparation of consolidated financial statements, summarizing the financial positions and operations of a parent company and its subsidiaries.