The primary purpose of the basic economic order quantity model is
A)to calculate the reorder point,so that replenishments take place at the proper time
B)to minimize the sum of carrying cost and holding cost
C)to maximize the customer service level
D)to minimize the sum of setup cost and holding cost
E)to calculate the optimum safety stock

Question

Quizplus · Accepted Answer

The basic Economic Order Quantity (EOQ) model aims to minimize the total cost of inventory management by finding the ideal order quantity that minimizes the sum of setup costs (or ordering costs) and holding costs (costs of carrying inventory).

The Primary Purpose of the Basic Economic Order Quantity Model