[amp_mcq option1=”carrying costs” option2=”relevant total costs” option3=”economic order quantity” option4=”reorder point” correct=”option4″]<\/p>\n
The correct answer is: D. reorder point<\/strong><\/p>\n The reorder point is the level of inventory at which a new order should be placed. It is calculated by multiplying the purchase order lead time by the number of units sold per unit of time. This ensures that there is always enough inventory on hand to meet demand while minimizing the costs of carrying inventory.<\/p>\n Carrying costs are the costs associated with holding inventory, such as storage costs, insurance costs, and obsolescence costs. Relevant total costs are the sum of carrying costs and ordering costs. Economic order quantity (EOQ) is the order quantity that minimizes the total costs of ordering and carrying inventory.<\/p>\n Here is a more detailed explanation of each option:<\/p>\n $$EOQ = \\sqrt{\\frac{2DC}{\\lambda}}$$<\/p>\n where:<\/p>\n $\\lambda$ is the annual holding cost per unit of inventory<\/p>\n<\/li>\n Reorder point<\/strong> is the level of inventory at which a new order should be placed. It is calculated by multiplying the purchase order lead time by the number of units sold per unit of time. This ensures that there is always enough inventory on hand to meet demand while minimizing the costs of carrying inventory.<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”carrying costs” option2=”relevant total costs” option3=”economic order quantity” option4=”reorder point” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-50074","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n\n
\n