Which One of the Following Statements Concerning the Economic Order

question 115

Multiple Choice

Which one of the following statements concerning the economic order quantity (EOQ) is TRUE?

• A) The EOQ is the order quantity that minimizes annual inventory holding costs.
• B) An increase in demand will increase the EOQ value.
• C) The time between orders
• D) The EOQ formula assumes that there are only three relevant costs: holding, transportation, and setup.

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Definitions:

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Social Security Tax

A tax that funds the Social Security program, which provides benefits for retired workers, disabled individuals, and their dependents.

Fiscal Year-End

The completion of a one-year, or 12-month, accounting period, after which a company will prepare financial statements.

Employee Benefits

Non-wage compensation provided to employees in addition to their normal wages or salaries, including health insurance, pensions, and vacation.