An operations strategy which recognizes high carrying costs and reduces ordering costs will result in
A)unchanged order quantities.
B)slightly decreased order quantities.
C)greatly decreased order quantities.
D)slightly increased order quantities.
E)greatly increased order quantities.

Question

Quizplus · Accepted Answer

An operations strategy that recognizes high carrying costs and reduces ordering costs will result in greatly decreased order quantities. This is because the goal of such a strategy is to minimize the total cost of inventory, which is the sum of carrying costs and ordering costs. By decreasing order quantities, the company can reduce carrying costs without significantly increasing ordering costs.

An Operations Strategy Which Recognizes High Carrying Costs and Reduces