{"id":46548,"date":"2024-04-15T22:13:56","date_gmt":"2024-04-15T22:13:56","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=46548"},"modified":"2024-04-15T22:13:56","modified_gmt":"2024-04-15T22:13:56","slug":"eoq-is-the-quantity-that-minimizes","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/eoq-is-the-quantity-that-minimizes\/","title":{"rendered":"EOQ is the quantity that minimizes:"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9759b7b16cc\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    Total Ordering Cost                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Total Inventory Cost                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Total Interest Cost                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Safety Stock Level                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: A. Total Ordering Cost.<\/p>\n<p>Economic order quantity (EOQ) is the optimal quantity of goods to order at a time in order to minimize total inventory costs. It is calculated by taking into account the ordering cost, carrying cost, and unit cost of the goods.<\/p>\n<p>The ordering cost is the cost of placing an order, such as the cost of the order form, the cost of shipping the goods, and the cost of the employee&#8217;s time to place the order. The carrying cost is the cost of holding inventory, such as the cost <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n   <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>          Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> of storage space, the cost of insurance, and the cost of obsolescence. The unit cost of the goods is the cost of each item in the order.<\/p>\n<p>The EOQ is calculated using the following formula:<\/p>\n<p>EOQ = \u00e2\u0088\u009a(2<em>D<\/em>C)\/H<\/p>\n<p>where:<\/p>\n<p>D = annual demand<br \/>\nC = ordering cost per order<br \/>\nH = carrying cost per unit per year<\/p>\n<p>The EOQ minimizes the total inventory cost, which is the sum of the ordering cost and the carrying cost. The total inventory cost is calculated using the following formula:<\/p>\n<p>Total Inventory Cost = D<em>C\/Q + Q<\/em>H\/2<\/p>\n<p>where:<\/p>\n<p>D = annual demand<br \/>\nC = ordering cost per order<br \/>\nQ = EOQ<br \/>\nH = carrying cost per unit per year<\/p>\n<p>The EOQ is a useful tool for businesses to minimize their inventory costs. By calculating the EOQ, businesses can order the optimal quantity of goods at a time to minimize their total inventory costs.<\/p>\n<p>The other options are incorrect because they do not represent the total inventory cost. Option B, total ordering cost, is only one component of the total inventory cost. Option C, total interest cost, is not a component of the total inventory cost. Option D, safety stock level, is the amount of inventory that is kept on hand to protect against unexpected demand or delays in delivery.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>EOQ is the quantity that minimizes:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/eoq-is-the-quantity-that-minimizes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EOQ is 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