When Comparing EOQ and JIT Inventory Systems, Which of the Following

question 8

Multiple Choice

When comparing EOQ and JIT inventory systems, which of the following statements is false?

• A) The EOQ approach takes the viewpoint that some inventory is necessary.
• B) The EOQ system assumes a constant order quantity.
• C) JIT argues that inventory investments should be minimized.
• D) The EOQ system focuses on acquisition and holding costs.
• E) JIT argues that safety stocks are necessary to reduce the probability of a stock shortage.

---

Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.

Supplier

A party that provides goods or services to another entity, typically part of a supply chain.

Revenue

The entire financial income obtained from transactions involving the sale of products or the provision of services central to an organization's main operations.

Income Elasticity

A measure of how the demand for a good or service changes with a change in consumers' income.