Which of the following statements is correct for a firm that currently has total costs of carrying and ordering inventory that is 50 percent higher than total carrying costs?

Question

Quizplus · Accepted Answer

The statement that the current order size is greater than optimal is correct because if the total costs of carrying and ordering inventory are 50 percent higher than the total carrying costs, it indicates that the ordering costs are disproportionately high, suggesting that the firm is ordering too infrequently and in large quantities, making the current order size greater than the optimal.

Which of the Following Statements Is Correct for a Firm