What is production order quantity model?The economic production quantity model (also known as the EPQ model) determines the quantity a company or retailer should order to minimize the total inventory costs by balancing the inventory holding cost and average fixed ordering cost. The EPQ model was developed by E.W. Taft in 1918.
Which of the following is not true about EOQ?Run size exceeds maximum inventory is not true about the EOQ model. Explanation: EOQ model is also referred to as the production lot size or the non-instantaneous gradual model. In the economic order quantity model, the rate of consumption and replenishment is not the same.
Which of the following statement is true about EOQ?Detailed Solution
Economic Order Quantity (EOQ) is that size of order which minimizes total annual costs of carrying and cost of ordering.
Which of the following is true of the EOQ model note that the optimal order quantity?Which of the following is true of the EOQ model? Note that the optimal order quantity, Q, will be called EOQ. If the average inventory increases by 20%, then the total carrying costs will increase by 20%.
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