Questions: In the economic production quantity (EPQ) model, costs are analogous to ordering costs.

The answer is setup.

Carrying costs, also known as holding costs, are the costs associated with storing and maintaining inventory over a period of time. These include costs for warehousing, insurance, and spoilage. They are not directly analogous to ordering costs in the EPQ model.

Total costs in the EPQ model refer to the sum of all relevant costs, including setup, carrying, and production costs. While total costs encompass ordering costs, they are not directly analogous to them.

Setup costs are the costs incurred to prepare equipment or processes for manufacturing a batch of products. In the EPQ model, setup costs are analogous to ordering costs in the Economic Order Quantity (EOQ) model. Both setup and ordering costs are incurred each time a new batch is produced or an order is placed, respectively. Therefore, setup costs are the correct analogy to ordering costs in the EPQ model.