Inflation affects the EOQ model in all of the following ways except:
A) changing the investment in accounts receivable.
B) encourages anticipatory buying.
C) increased carrying costs.
D) encourages buying early to avoid price increases.

Question

Quizplus · Accepted Answer

Inflation does not directly affect the investment in accounts receivable, which is a component of the cash conversion cycle, but it can indirectly affect it through changes in customer behavior and payment patterns. The other options are all ways in which inflation affects the EOQ model.

Inflation Affects the EOQ Model in All of the Following