Which of the following statements about the economic-order-quantity decision model is FALSE?
A)It assumes purchasing costs are relevant when the cost per unit changes due to the quantity ordered.
B)It assumes quality costs are irrelevant if quality is unaffected by the number of units purchased.
C)It assumes stockout costs are irrelevant if no stockouts occur.
D)It assumes ordering costs and carrying costs are relevant.

Question

Quizplus · Accepted Answer

The economic-order-quantity model assumes purchasing costs are irrelevant because it focuses on minimizing the sum of ordering and carrying costs, not the cost per unit.

Which of the Following Statements About the Economic-Order-Quantity Decision Model