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

Question

Quizplus · Accepted Answer

The EOQ model considers two types of costs: ordering costs and carrying costs. Ordering costs are the costs involved in placing an order, such as setup costs and freight charges. Carrying costs are variable costs per unit of holding an item of inventory for a specified time period, such as storage costs, insurance, and obsolescence. Therefore, the correct answer is C - carrying costs.

In the EOQ Model, ________ Costs Are the Variable Costs