Question

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model, the average amount of inventory on hand?
a. is smaller than the holding cost per unit. b. is one-half of the economic order quantity. c. goes down if the holding cost per unit goes down. d. is zero. e. goes down if the setup cost per order goes up.

Answer 1

The average amount of inventory is one-half of the economic order quantity. That condition occurs when the actual order quantity in a problem that meets the assumptions of the economic order quantity model.

Inventory or also known as stock generally can be described as  the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. EOQ or also known as economic order quantity can be defined as a company's optimal order quantity that meets demand while minimizing its total costs related to ordering, receiving, and holding inventory.

Learn more about economic order quantity here https://brainly.com/question/16986815

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