Total ordering and holding costs
A)are relatively stable.
B)are relatively stable around the economic order quantity.
C)are relatively unstable around the economic order quantity.
D)are unstable.

Question

Quizplus · Accepted Answer

Total ordering and holding costs are relatively stable around the economic order quantity because this is the point at which the costs of ordering and holding inventory are minimized. As inventory levels increase or decrease from this point, the costs will start to rise again. Therefore, the ordering and holding costs will fluctuate around the economic order quantity, which is why they are relatively stable in this area.

Total Ordering and Holding Costs