b. carrying costs.d. order-filling costs.3. Inventory management requires the firm to balance the quantity of inventory on hand for operations with themvestment in inventory. Two cost categories in inventory management are order costs and carrying costs.a The carrymg costs include handling costs, interest on capital invested, and obsolescence.b. The order costs include quamtity discounts lost, handling costs, and setup costs for a production rum.c. The carrying costs mclude purchasing costs, shipping costs, quantity discounts lost, and setup costs.d. The order costs include insurance costs, shipping costs, and obsolescence. 6. The Economic Order Quantity (EOQ) model can be used to establish mventory policy. In the case of amanufacturer,the EOQ is called the Economic Lot Size (ELS) or Economic Production Quantity (EPQ).Which of the following statements about the ELS is incorrect?a. The objective of the ELS model is to minimize the sum of mventory carrying costs and the costs ofproductionb. In the ELS model, the production rate is deemed to. be instantaneous.c. In the ELS model, the demand is assumed to occur at a constant rate over some period of time.d. The ELS model is used to maximize contribution margin or minimize costs given resource constraints.runs or setup costs.

EOQ provides an order quantity where holding costs and ordering costs are minimized.

3. Inventory management requires the firm to balance the quantity of inventory on hand for operations with the investment in inventory. Two cost categories in inventory management are order costs and carrying costs. a The carrying costs include handling costs, interest on capital invested, and obsolescence. b. The order costs include quantity discounts lost, handling costs, and setup costs for a production rum. c. The carrying costs include purchasing costs, shipping costs, quantity discounts lost, and setup costs. d. The order costs include insurance costs, shipping costs, and obsolescence.

3. Inventory management requires the firm to balance the quantity of inventory on hand for operations with the investment in inventory. Two cost categories in inventory management are order costs and carrying costs. a The carrying costs include handling costs, interest on capital invested, and obsolescence. b. The order costs include quantity discounts lost, handling costs, and setup costs for a production rum. c. The carrying costs include purchasing costs, shipping costs, quantity discounts lost, and setup costs. d. The order costs include insurance costs, shipping costs, and obsolescence.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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