Question

……………….. is the order size that minimizes the sum of ordering and holding costs related to raw material inventories

A Efficient Order Correct Answer Incorrect Answer
B Cost Minimising Correct Answer Incorrect Answer
C EOQ Correct Answer Incorrect Answer
D B or C Correct Answer Incorrect Answer
E A or B Correct Answer Incorrect Answer

Solution

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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