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

question 17

Multiple Choice

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

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

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Definitions:

Aptitude Tests

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Manufacturing Sector

The branch of industry involved in the production of goods using raw materials and machinery.

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A system that involves the production, distribution, and consumption of goods and services within a particular geographic region.

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