To minimize costs associated with managing inventory, the POM department has to decide when to order and how much to order. One inventory model that is used to answer both questions is the ___________________model. It takes all costs into consideration.
A) Economic order quantity EOQ)
B) Online transaction processing OLTP)
C) Transportation management systems TMS)
D) Standard Operation Procedures SOP)

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) model is specifically designed to minimize inventory costs by determining the optimal order quantity and reorder points. It takes into account all relevant costs, including ordering costs, holding costs, and stockout costs. OLTP is a data processing system used in e-commerce, TMS is used for managing transportation logistics, and SOP is a set of instructions for routine operations. None of these models address inventory management specifically, making A the correct choice.

To Minimize Costs Associated with Managing Inventory, the POM Department