In the EPQ model,______.
A)the larger the quantity produced from each production setup,the fewer production runs are needed to meet demand
B)the smaller the quantity produced from each production setup,the fewer production runs are needed to meet demand
C)the larger the quantity produced from each production setup,the fewer production runs are needed to avoid stock outs
D)the smaller the quantity produced from each production setup,the fewer production runs are needed to avoid stock outs

Question

Quizplus · Accepted Answer

In the EPQ model, the larger the quantity produced from each production setup, the lower the setup cost per unit and the higher the holding cost per unit. As a result, larger quantities are produced in each production run to minimize the total cost of inventory, which leads to fewer production runs. Therefore, choice A is the best choice.

In the EPQ Model,______