Which of the following is not a factor in the EOQ inventory model?
A)Annual demand for the inventory in units
B)Cost of the inventory item
C)Cost to place one additional order
D)Cost to carry one additional unit in inventory

Question

Quizplus · Accepted Answer

The EOQ (Economic Order Quantity) model focuses on finding the most cost-effective quantity to order that minimizes total inventory costs, which include ordering costs (cost to place one additional order) and carrying costs (cost to carry one additional unit in inventory), as well as the annual demand for the inventory in units. The cost of the inventory item itself is not a direct factor in calculating EOQ; rather, EOQ is concerned with the costs associated with ordering and holding inventory.

Which of the Following Is Not a Factor in the EOQ