In the EOQ model, ________ costs are the variable costs per unit of holding an item of inventory for a specified time period.
A) marginal
B) order
C) carrying
D) processing

Question

Quizplus · Accepted Answer

In the EOQ model, carrying costs refer to the variable costs per unit of holding an item of inventory for a specified time period, such as storage, insurance, interest, and handling costs. Marginal costs are incremental costs associated with producing a specific quantity of goods or services, while order costs (also known as setup costs or procurement costs) are the fixed costs incurred whenever a company places an order for inventory. Processing costs are the expenses associated with fulfilling an order, such as picking, packing, and shipping costs.

In the EOQ Model, ________ Costs Are the Variable Costs