1. Which one of the following statements regarding the economic order quantity (EOQ) is TRUE?
The EOQ model combines several different item orders to the same supplier.
An increase in demand will increase the EOQ.
The EOQ formula assumes that there are only three relevant costs: holding, transportation, and setup.
The EOQ model assumes a variable demand pattern.
2. A change has a ______________ when it is favorable for the system.
a. functional effect
b. neutralizing effect
c. dysfunctional effect
d. bandwagon effect