According to the EPQ model,the larger the quantity produced from each production setup ______.
A)the fewer production runs are needed to meet demand requirements and the smaller will be the total annual setup cost
B)the more production runs are needed to meet the demand requirements and the smaller will be the total annual setup cost
C)the fewer production runs are needed to meet the demand requirements and the higher will be the total annual setup cost
D)the more production runs are needed to meet demand requirements and the higher will be the total annual setup cost

Question

Quizplus · Accepted Answer

According to the EPQ model, the larger the quantity produced from each production setup, the fewer production runs are needed to meet demand requirements. This is because a larger quantity would last longer before running out, reducing the frequency of production setup. As a result, the total annual setup cost would be smaller as well. Therefore, option A is correct.

According to the EPQ Model,the Larger the Quantity Produced from Each