Question

Economic Order Quantity aims to minimize _______

• A. Total ordering and carrying cost
• B. Drug expiry
• C. Theft
• D. Transportation

Hint:

EOQ gives the order quantity at which total ordering cost and carrying cost are minimum.

Answer 1

The Correct Option is A

Concept:
Economic Order Quantity is an inventory control method used to decide the most economical quantity to order.

Step 1: Ordering cost.
Ordering cost includes expenses related to placing and processing orders.

Step 2: Carrying cost.
Carrying cost includes storage, handling, insurance, and inventory holding cost.

Step 3: Aim of EOQ.
EOQ balances ordering cost and carrying cost so that total inventory cost becomes minimum.

Step 4: Final answer.
Therefore, EOQ aims to minimize total ordering and carrying cost. \[ \boxed{\text{Total ordering and carrying cost}} \]