Which of the following statements is/are correct?
i. The economic order quantity determines the optimum order size for individual inventory items.
ii. The economic order quantity cannot be used in a manufacturing organisation.
iii. The economic order quantity minimises the sum of the ordering and carrying costs.

Question

Quizplus · Accepted Answer

i. The economic order quantity is a formula used to determine the optimum order size for individual inventory items, taking into account the cost of ordering and holding inventory. 
ii. The economic order quantity can be used in both manufacturing and non-manufacturing organizations. 
iii. The economic order quantity minimizes the total cost of inventory by balancing the costs of ordering and holding inventory. Hence, option (i) and (iii) are correct.

Which of the Following Statements Is/are Correct