Which of the Following Is Not an Assumption of the Economic

question 92

Multiple Choice

Which of the following is not an assumption of the economic order quantity model shown below? Q∗ =

• A)Demand is known,constant,and independent.
• B)Lead time is known and constant.
• C)Quantity discounts are not possible.
• D)Production and use can occur simultaneously.
• E)The only variable costs are setup cost and holding (or carrying)cost.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of the accounts.

Ledger

A comprehensive collection of all accounts and transactions of a company or individual, recorded in a systematic manner.

Account Balance

The amount of money in a financial repository at any given moment, which can fluctuate with deposits, withdrawals, and interest payments.

Chart of Accounts

An organized list of all the different financial accounts used by an entity to categorize transactions.