In the calculation for the economic order quantity,______.
A)both ordering costs and holding costs are exact values
B)the ordering costs are approximate,but the holding costs are exact values
C)the ordering costs are exact values,but the holding costs are approximate
D)both ordering costs and holding costs are approximate

Question

Quizplus · Accepted Answer

In the calculation for the Economic Order Quantity (EOQ), both ordering costs and holding costs are considered as approximate values. This is because it is difficult to precisely determine all the factors that influence these costs in real-world scenarios. Factors such as storage costs, insurance, and ordering costs can vary, making it challenging to pinpoint exact values.

In the Calculation for the Economic Order Quantity,______