The economic production run quantity directly affects the
A)order point for raw material inventories.
B)safety stock for finished goods inventory.
C)level of finished goods inventory.
D)lead time for producing finished goods inventory.

Question

Quizplus · Accepted Answer

The economic production run quantity (EPRQ) determines the level of finished goods inventory. This is because the EPRQ is a calculation that determines the most cost-efficient quantity of goods to produce at one time, which minimizes excess inventory costs. The quantity produced at the EPRQ becomes the standard order quantity for finished goods inventory, which affects the level of finished goods inventory. Therefore, the correct answer is C.

The Economic Production Run Quantity Directly Affects the