The annual relevant total costs are at a minimum where relevant ordering costs and their relevant carrying costs are equal.

Question

Quizplus · Accepted Answer

This statement is true according to the Economic Order Quantity (EOQ) formula, which calculates the optimal order quantity that minimizes total relevant costs, including both ordering and carrying costs. At the point where ordering costs equal carrying costs, the total relevant costs are minimized.

The Annual Relevant Total Costs Are at a Minimum Where