What is the objective of economic order quantity?
A)minimize the sum of carrying costs and order costs for the period.
B)maximize the sum of carrying costs and order costs for the period.
C)minimize carrying costs and maximize order costs for the period.
D)maximize carrying costs and minimize order costs for the period.

Question

Quizplus · Accepted Answer

The objective of economic order quantity is to minimize the total cost associated with inventory management. This cost includes both carrying costs (such as storage, insurance, and obsolescence) and order costs (such as setup and processing). Therefore, the optimal order quantity should balance these two costs to find the most efficient inventory level. Option A corresponds to this objective.

What Is the Objective of Economic Order Quantity