Question

4. The EOQ model is designed to emphasize the trade-off between which of the following factors?

a) purchasing costs and ordering costs

b) purchasing costs and carrying costs

c) stock-out costs and ordering costs

d) stock-out costs and carrying costs

e) carrying costs and ordering costs

3. A just-in-time manufacturing system:

1. Is a demand-pull system
2. Is a process in which it is difficult to maintain product quality
3. Is a process that requires a lot of storage area for inventories
4. Uses an assembly line for manufacturing

Answer 1

4. The EOQ model is designed to emphasize the trade-off between which of the following factors?

Answer: (e) carrying costs and ordering costs.

Explanation:

It seeks to find the optimal ordering quantity that minimizes the total inventory costs by achieving a trade-off between carrying and ordering costs.

A just-in-time manufacturing system:

1. Is a demand-pull system

Production is done when only when there is need for sale, materials are purchased only when they are needed and so on. Thus, it is the demand for goods that pulls the processes.