Which of the following statements is best?
I. The EOQ should be used with lumpy demand.
II. Transportation cost should be included in the cost of ordering.
III. Anticipation inventory should be built based on capacity and future demand.
A) I and II only are true
B) I and III only are true
C) II and III only are true
D) all the above are true
E) none of the above are true

Question

Quizplus · Accepted Answer

II and III are correct because transportation cost is indeed part of the total cost of ordering, and anticipation inventory is built in anticipation of future demand and capacity constraints. The EOQ model is not suitable for lumpy demand due to its assumption of constant demand.

Which of the Following Statements Is Best