In the single-period inventory model, the optimal order quantity is solved using:
A) marginal economic analysis.
B) total cost analysis.
C) an ABC analysis.
D) a reorder point analysis.

Question

Quizplus · Accepted Answer

The optimal order quantity in the single-period inventory model is determined through marginal analysis, where the marginal cost of ordering one additional unit is set equal to the marginal benefit of ordering that additional unit. The goal is to find the order quantity that minimizes total cost, which is the sum of ordering cost and expected holding and shortage costs. Therefore, the correct answer is A, marginal economic analysis.

In the Single-Period Inventory Model, the Optimal Order Quantity Is