WGU C720 Exam | Questions with 100% Correct
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Terms in this set (65)
Operational Stategies Main Objectives: how a business achieves
Module 1,2,12, organizational goals & competitive advantage
16 - Questions through operations & inventory management
Inventory Models EOQ
EPQ
QDM
(Purpose of EOQ and EPQ is to minimus costs of
ordering/
holding inventory
Holding/Carrying Costs The costs of holding inventory; includes costs for
storage space, interest paid on borrowed money
to finance the inventory, and any losses incurred
due to damage or obsolescence.
,Economic Order Quantity (EOQ) costs for ordering/holding inventory per order
Finished goods
*Demand is known
*cost per unit not dependent on quantity
* Entire order delivered at once
when holding goes up, ordering goes down & vice-
versa
EOQ = intersection point where total annual
variable costs for holding and ordering inventory
coincide.
Economic Production Quantity (EPQ) A model that helps companies control the cost of
ordering, receiving, and holding inventory; this
model allows for incomplete inventory to arrive,
thus proving useful for businesses that produce
their own parts; also known as Production Order
Quantity. RAW Materials
*Inventory is arriving into storage and sent out into
a production process*
Quantity discount Model (QDM)/ A discount offered in price for ordering above a
Transportation discounts specified amount
discount offered on shipping costs for ordering
above a specified amount
, Revenue Sharing When 2+ companies partner and divides the profits
received based on an agreement between all
parties involved.
Reserve Capacity When a company stores, or pays another company
to store, excess inventory to be used for
unexpected demand
Key Processes Organizations must have:
a. Strategy development
b. product development
c. system development to produce services and
goods
d. order fulfillment
to leverage impact
Primary Constraints in a System Market (Demand),
Process (throughput)
Product (Supply)
Answers | Verified | Latest Update 2026
Save
Terms in this set (65)
Operational Stategies Main Objectives: how a business achieves
Module 1,2,12, organizational goals & competitive advantage
16 - Questions through operations & inventory management
Inventory Models EOQ
EPQ
QDM
(Purpose of EOQ and EPQ is to minimus costs of
ordering/
holding inventory
Holding/Carrying Costs The costs of holding inventory; includes costs for
storage space, interest paid on borrowed money
to finance the inventory, and any losses incurred
due to damage or obsolescence.
,Economic Order Quantity (EOQ) costs for ordering/holding inventory per order
Finished goods
*Demand is known
*cost per unit not dependent on quantity
* Entire order delivered at once
when holding goes up, ordering goes down & vice-
versa
EOQ = intersection point where total annual
variable costs for holding and ordering inventory
coincide.
Economic Production Quantity (EPQ) A model that helps companies control the cost of
ordering, receiving, and holding inventory; this
model allows for incomplete inventory to arrive,
thus proving useful for businesses that produce
their own parts; also known as Production Order
Quantity. RAW Materials
*Inventory is arriving into storage and sent out into
a production process*
Quantity discount Model (QDM)/ A discount offered in price for ordering above a
Transportation discounts specified amount
discount offered on shipping costs for ordering
above a specified amount
, Revenue Sharing When 2+ companies partner and divides the profits
received based on an agreement between all
parties involved.
Reserve Capacity When a company stores, or pays another company
to store, excess inventory to be used for
unexpected demand
Key Processes Organizations must have:
a. Strategy development
b. product development
c. system development to produce services and
goods
d. order fulfillment
to leverage impact
Primary Constraints in a System Market (Demand),
Process (throughput)
Product (Supply)
