What Costs Are Considered in the Quantity Discount Model

question 71

Multiple Choice

What costs are considered in the quantity discount model?

• A) annual ordering costs + annual holding costs
• B) annual purchasing costs + annual holding costs + annual ordering costs
• C) annual ordering costs + annual holding costs + annual shortage costs
• D) annual purchasing costs + annual ordering costs + annual shortage costs
• E) ordering costs per order + annual holding costs

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Definitions:

Rate of Return

A financial ratio that calculates the percentage of profit or loss made on an investment relative to its cost.

Internal Rate

Often referring to the internal rate of return (IRR), it's the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Screening Tool

A method or instrument used to evaluate or identify certain characteristics or conditions, often used in the context of health care or recruitment.

Internal Rate

Internal Rate, often referred to as Internal Rate of Return (IRR), is the discount rate that makes the net present value (NPV) of all cash flows from a particular project zero.