Which statement concerning the economic order quantity (EOQ) model is not correct?
A) A decrease in the number of orders increases the overall cost of ordering inventory.
B) The lower the level of inventory held, the greater the number of orders required.
C) The more inventory that is held, the higher the cost of holding inventory.
D) None of the above, i.e. all are correct statements.

Question

Quizplus · Accepted Answer

A decrease in the number of orders actually decreases the overall cost of ordering inventory, as there are fewer setup costs and reduced administrative costs associated with placing fewer orders.

Which Statement Concerning the Economic Order Quantity (EOQ) Model Is