12. When the EOQ model is used, the average annual inventory holding cost equals the

average annual ordering cost at the optimal order quantity.

(a) True

(b) False

3

13. When the EOQ model is used, the average annual inventory holding cost increases as

the order quantity increases.

(a) True

(b) False

14. When the EOQ model is used, the average annual ordering cost increases as the order

quantity increases.

(a) True

(b) False

15. When the EOQ model is used, the average annual purchase cost increases as the order

quantity increases.

(a) True

(b) False

16. is the inventory level when one places an order.

(a) Safety stock

(b) Order inventory

(c) Reorder point