If Your Company Had an Annual Purchase Cost of Items

Multiple Choice

If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $50,000 this scenario would reveal that:

A) Your order size was lower than the EOQ
B) Your order lot size was equal to the EOQ
C) Your order lot size was higher than the EOQ
D) Nothing because there is insufficient information to discern where the EOQ would be.