Which of the following statements is true of the economic-order-quantity decision model?
A) It assumes purchasing costs are relevant because the cost per unit changes due to the quantity ordered.
B) It assumes that quality costs are considered only to the extent that these costs affect ordering or carrying costs.
C) It assumes that stockout costs are relevant even if no stockouts occur.
D) It assumes that ordering costs and carrying costs are irrelevant.

Question

Quizplus · Accepted Answer

The economic-order-quantity (EOQ) model considers quality costs only as they impact ordering or carrying costs, focusing on minimizing total inventory costs.

Which of the Following Statements Is True of the Economic-Order-Quantity