Which of the Following Statements Is NOT True of Economic

question 44

Multiple Choice

Which of the following statements is NOT true of economic order quantity (EOQ) ?

• A) The economic order quantity (EOQ) mathematically determines the minimum total inventory cost.
• B) The EOQ ignores inventory reorder costs and inventory carrying costs.
• C) The optimal order size is determined by the EOQ model.
• D) The EOQ is directly proportional to the sales per period.

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Definitions:

Percentage Change

Percentage change refers to the measure of the degree of change over time, calculated as the difference between two values divided by the original value, times 100.

Base Year

A specific year against which economic or financial indices are measured to track changes and trends over time.

Profit Margin Ratio

A financial ratio that measures the percentage of revenue that exceeds the cost of goods sold, indicating how much profit a company makes for each dollar of sales.

Asset Turnover Ratio

The Asset Turnover Ratio is a financial metric that measures the efficiency of a company in generating sales revenue from its assets.