Which of the following is a type of inventory system?

• A. Pipeline inventory
• B. Safety stock
• C. EOQ Model
• D. Obsolete inventory

Answer: (C)

The main idea here is an inventory control method that tells you how much to order each time to minimize total costs. The EOQ model provides a simple, repeatable rule for ordering: pick a fixed order quantity and place an order whenever stock drops to a trigger level. This balances two big cost drivers—ordering costs (costs to place orders) and holding costs (costs to carry inventory). Under steady demand and constant costs, the EOQ model identifies the quantity that minimizes the sum of those costs, making it a formal system for governing when and how much to order.

That’s why it’s the best fit: it’s a defined policy or system for managing inventory, not just a state or condition of stock. The other terms describe inventory situations rather than a controlling procedure—pipeline inventory is goods in transit, safety stock is extra buffer stock, and obsolete inventory is stock that can no longer be used or sold.