Economic order quantity (EOQ)helps a business to think in terms of:
A) factoring receivables.
B) ordering costs and carrying costs.
C) pledging receivables.
D) ordering costs and operating lease.

Question

Quizplus · Accepted Answer

Economic order quantity (EOQ) is a formula that helps businesses determine the optimal amount of inventory to order, taking into account both ordering costs and carrying costs. Ordering costs are the costs associated with placing an order, such as processing paperwork or paying for shipping, while carrying costs are the costs associated with holding inventory, such as storage, insurance and obsolescence. By using EOQ, a business can minimize the total cost of inventory management. Factoring and pledging receivables are related to financing, while operating leases are related to leasing assets rather than inventory management.

Economic Order Quantity (EOQ)helps a Business to Think in Terms