A conflict between the EOQ model's optimal order quantity and the order quantity the purchasing manager, evaluated on conventional accounting numbers, regards as optimal is considered a(n):
A)problem for the chief financial officer to resolve
B)problem for the performance evaluation system to resolve
C)goal congruence
D)opportunity cost

Question

Quizplus · Accepted Answer

The conflict between the EOQ model's optimal order quantity and the purchasing manager's preferred order quantity based on conventional accounting numbers suggests that the performance evaluation system may need to be reevaluated. This is because the purchasing manager has different incentives and objectives that may not align with the EOQ model's optimal order quantity. By reevaluating the performance evaluation system, the organization can ensure that it aligns with the overall goals of the organization and reduces conflicts between different departments.

A Conflict Between the EOQ Model's Optimal Order Quantity and the Order