At the optimal order quantity (EOQ),the total annual ordering cost is given by ______.
A)(Annual demand * EOQ)/ Ordering cost per order
B)(Annual demand + EOQ)* Ordering cost per order
C)(Annual demand - EOQ)- Ordering cost per order
D)(Annual demand / EOQ)* Ordering cost per order

Question

Quizplus · Accepted Answer

The correct formula for total annual ordering cost at the optimal order quantity (EOQ) is given by (Annual demand / EOQ) * Ordering cost per order. This formula calculates how many times an order is placed in a year and multiplies it by the cost of placing a single order.

At the Optimal Order Quantity (EOQ),the Total Annual Ordering Cost