Which of the Following Statements About the Basic EOQ Model

question 63

Multiple Choice

Which of the following statements about the basic EOQ model is TRUE?

• A)If the ordering cost were to double,the EOQ would rise.
• B)If annual demand were to double,the EOQ would increase.
• C)If the carrying cost were to increase,the EOQ would fall.
• D)If annual demand were to double,the number of orders per year would increase.
• E)All of the above statements are true.

---

Definitions:

International Markets

Markets that span across countries and continents, allowing for the trading and selling of goods and services globally.

Research and Development Costs

Expenses related to the investigation and discovery of new knowledge, products, or processes, which can improve a company's future performance and competitiveness.

Direct Ownership

A situation in which an individual or entity holds direct title to assets, such as property or stocks, without any intermediaries.

Political Risk

The potential for losses or other adverse effects on business operations due to political instability or changes in government policies.