The economic order quantity (EOQ) formula requires the calculation of holding costs and ordering costs. Determine whether the following costs are items that should be included in holding costs,
Ordering costs or should not be included at all. The cost of failing to see the full extent of problems
Within an operation should be included in:
A) Holding cost
B) Ordering cost
C) Should not be included

Question

Quizplus · Accepted Answer

The cost of failing to see the full extent of problems within an operation is not a holding cost or ordering cost. It is a separate cost that should not be included in either of these categories.

The Economic Order Quantity (EOQ) Formula Requires the Calculation of Holding