In the EOQ model,if shortages are not allowed,then ______.
A)stock-out costs do not exist
B)stock-out costs are high
C)stock-out costs are low
D)stock-out costs are acceptable

Question

Quizplus · Accepted Answer

If shortages are not allowed, it means that the company must always have enough inventory to meet demand. Therefore, stock-out costs (costs associated with a lack of inventory when demand is present) do not exist.

In the EOQ Model,if Shortages Are Not Allowed,then ______