In the EOQ model,the optimal order quantity is the amount at which ______.
A)ordering costs and holding costs are inversely related
B)ordering costs and holding costs are directly related
C)ordering costs and stock-out costs are directly related
D)ordering costs and stock-out costs are inversely related

Question

Quizplus · Accepted Answer

In the Economic Order Quantity (EOQ) model, the optimal order quantity is determined at the point where ordering costs and holding costs are inversely related. This means as the quantity ordered increases, ordering costs decrease but holding costs increase, and the EOQ aims to find a balance between these two costs.

In the EOQ Model,the Optimal Order Quantity Is the Amount