The Allianz Company Produces a Specialty Wood Furniture Product, and Has

Multiple Choice

The Allianz Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:

Annual demand is 30,000 packages per year. The purchase price per package is $53.
Which of the following statements is true of Allianz's EOQ system costs?

A) At EOQ, the annual relevant ordering costs is exactly the half of annual relevant carrying costs.
B) At EOQ, the annual relevant carrying costs is higher than the annual relevant ordering costs.
C) At EOQ, the annual relevant carrying costs is exactly the half of the annual relevant total costs.
D) At EOQ, the annual relevant carrying costs is equal to the annual relevant total costs.