At the optimal order quantity size, the:
A) total cost of holding inventory is fully offset by the restocking costs.
B) carrying costs are equal to zero.
C) restocking costs are equal to zero.
D) total costs equal the carrying costs.
E) carrying costs equal the restocking costs.

Question

Quizplus · Accepted Answer

At the optimal order quantity size, the carrying costs (costs of holding inventory) are equal to the restocking costs (costs associated with ordering or producing more inventory). This balance minimizes the total inventory cost.

At the Optimal Order Quantity Size, The