Relevant total costs in the economic order quantity decision model equal relevant ordering costs plus which of the following costs?
A) carrying costs
B) stockout costs
C) quality costs
D) purchasing costs

Question

Quizplus · Accepted Answer

The economic order quantity decision model includes relevant ordering costs and carrying costs. Stockout costs and quality costs are not typically included in this model, and purchasing costs are already accounted for in the ordering costs. Therefore, the relevant total costs in the economic order quantity decision model equal relevant ordering costs plus carrying costs.

Relevant Total Costs in the Economic Order Quantity Decision Model