Relevant total costs in the economic order quantity decision model equal relevant ordering costs plus relevant ________.
A) carrying costs
B) stockout costs
C) quality costs
D) purchasing costs

Question

Quizplus · Accepted Answer

In the economic order quantity decision model, relevant total costs are the sum of relevant ordering costs and relevant carrying costs. Stockout costs, quality costs, and purchasing costs are not included in the calculation of the economic order quantity.

Relevant Total Costs in the Economic Order Quantity Decision Model