Question
……………….. is the order size that minimizes
the sum of ordering and holding costs related to raw material inventoriesSolution
Economic order quantity (EOQ) is the order size that minimizes the sum of ordering and holding costs related to raw material inventories. · It is the optimal inventory size that should be ordered with the supplier to minimize the total annual inventory cost of the business.
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The discount rate that makes the present value of expected cash flows from the project equal to the initial cost of the project is called:
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