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Which of the following best describes the EOQ model's main objective?

  • A.Maximize sales
  • B.Minimize lead time
  • C.Maximize stock availability
  • D.Minimize total inventory costs

Answer: D

The main objective of the EOQ (economic order quantity) model is to minimise the total inventory costs. It finds the order size at which the sum of the ordering cost and the holding cost is least. The model does not aim at maximising sales, minimising lead time or maximising stock availability, which would raise holding cost.

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