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If the Marginal Reduction in Order Costs Exceeds the Marginal

Question 43

Multiple Choice

If the marginal reduction in order costs exceeds the marginal carrying cost of inventory,then:


A) the firm has minimized its total carrying costs.
B) the firm should increase its order size.
C) the firm should decrease its order size.
D) the firm has maximized its order costs.

Correct Answer:

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