According to the Assumptions Upon Which the EOQ Model Is

question 20

Multiple Choice

According to the assumptions upon which the EOQ model is based,total inventory costs _______________ with increases in the number of units ordered in each order.

• A)first increases,then decreases
• B)first decreases,then increases
• C)increases,but at a slowing rate
• D)decreases,but at a slowing rate

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), an indicator of a company's profitability from its core business activities, excluding non-operating income and expenses.

Break-even Point

The point at which total revenue equals total costs and expenses, resulting in neither profit nor loss.

Dollar Sales

The total value of sales made by a business within a certain period, measured in dollars.

Selling Price

The amount of money for which a product or service is sold to the customer.