In relation to the economic order quantity model:
A) the higher the price paid for inventory, the less frequently it should be ordered.
B) the higher the price paid for inventory, the more frequently it should be ordered.
C) the price paid for inventory does not directly affect the frequency of inventory ordering.
D) none of the above is true.

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) model focuses on minimizing the total holding costs and ordering costs. The price paid for inventory affects the total cost but does not directly influence the frequency of orders, which is determined by the EOQ formula.

In Relation to the Economic Order Quantity Model