The economic order quantity approach states that inventory order sizes should be determined by:
A)dividing annual item sales by the carrying cost per item and multiplying by 2.
B)computing the average number of items sold each month.
C)equating restocking costs with carrying costs.
D)dividing the inventory into various groups based on the value per item.
E)computing the amount of the derived demand.

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) model aims to minimize the total cost of inventory by equating the ordering costs with the carrying costs.

The Economic Order Quantity Approach States That Inventory Order Sizes