Examveda

Economic order quantity is that quantity at which cost of holding and carrying inventory is:

A. Maximum and equal

B. Minimum and equal

C. It can be maximum or minimum depending upon case to case

D. Minimum and unequal

Answer: Option B

Solution (By Examveda Team)

Economic order quantity is that quantity at which cost of holding and carrying inventory is minimum and equal. Economic order quantity (EOQ) is the ideal order quantity a company should purchase for its inventory given a set cost of production, a certain demand rate, and other variables. This is done to minimize inventory holding costs and order-related costs.

This Question Belongs to Commerce >> Costing

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