The ___ form of inventory control automatically orders a fixed number of items every time an inventory level falls to a predetermined point.
A) just-in-time scheduling
B) reakeven
C) balanced scorecard
D) asset management
E) economic order quantity

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) formula is used to calculate the optimal quantity of goods to order to minimize the total cost of inventory management, including ordering costs and holding costs. The basic EOQ model assumes that demand and lead time are constant, and that orders are received in a single delivery. The fixed order quantity (FOQ) method is a variation of the EOQ model that involves ordering a fixed quantity of items each time the inventory level drops to a certain point, known as the reorder point. This method ensures that inventory is replenished before it runs out, and reduces the risk of stockouts, but also involves higher carrying costs and ordering costs than the EOQ method.

The ___ Form of Inventory Control Automatically Orders a Fixed