Which of These Statements About the Production Order Quantity Model

question 53

Multiple Choice

Which of these statements about the production order quantity model is FALSE?

• A)The production order quantity model is appropriate when the assumptions of the basic EOQ model are met,except that receipt is noninstantaneous.
• B)Because receipt is noninstantaneous,some units are used immediately and not stored in inventory.
• C)Average inventory is less than one-half of the production order quantity.
• D)All else equal,the smaller the ratio of demand rate to production rate,the larger is the production order quantity.
• E)None of the above is false.

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