_____ costs are not changed by the order size or frequency of ordering,so they are not included in the inventory policy model.
A)Fixed
B)Variable
C)Overhead
D)Order

Question

Quizplus · Accepted Answer

Fixed costs are not affected by the order size or frequency of ordering, hence they are not included in the inventory policy model. Variable costs, on the other hand, are influenced by order size and frequency, and are therefore relevant to the inventory policy. Overhead costs are indirect costs of operations and may be included in the inventory policy depending on the nature of the item being inventoried. Order costs are the costs of placing an order, such as shipping and handling costs, and are relevant to the inventory policy.

_____ Costs Are Not Changed by the Order Size or Frequency