Question

In: Operations Management

the primary purpose of the Economic Order Quantity (EOQ) model is to: A. Maximize the customer...

the primary purpose of the Economic Order Quantity (EOQ) model is to:

A. Maximize the customer service level

B. Calculate the reorder point, so that replenishment take place at the proper time

C. Calculate the optimum safety stock level

D. None of these answers

Solutions

Expert Solution

The correct option is D. None of these answers as the primary purpose of EOQ is to minimize the inventory cost.

Do give a positive rating if you think this answer helped

keosha answered 2 years ago
Next > < Previous

Related Solutions

Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model?...
Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model? a. Holding and ordering costs are stable and known. b. Demand is constant and known. c. Supply lead time is constant and known. d. Quantity discounts are possible. Kim’s Nail Salon uses a weighted moving average method to forecast demand. She assigns a weight of 5 to the previous month’s demand, 3 to demand two months ago, and 2 to demand three months ago....
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying...
The Economic Order Quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and...
The simple economic order quantity (EOQ) model shows how much to order (i.e., lot size) in...
The simple economic order quantity (EOQ) model shows how much to order (i.e., lot size) in terms of holding costs, setup (ordering) costs, and total inventory cost.  In terms of this model, why is it necessary to reduce setup cost if we desire smaller lot sizes? Draw the inventory cost curves diagram and fully explain.
In inventory management, economic order quantity (EOQ) is the order quantity that minimizes the total holding...
In inventory management, economic order quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering costs. It is one of the oldest classical production scheduling models. Requirements: Discuss the EOQ Model using an quantitative example computation with interpretation of the solution. 2. The B. N. Thayer and D. N. Thaht Computer Company sells a desktop computer that is popular among gaming enthusiasts. In the past few months, demand has been relatively consistent, although it does fluctuate...
Economic Order Quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering...
Economic Order Quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering costs. 1) What's the impact of a positive lead time on EOQ? 2) Can supply chain managers in fast-fashion industries apply the EOQ model to manage their inventories? If yes, how? If no, why?
In this assignment you’ll solve the basic economic order quantity (EOQ) model in Excel using two...
In this assignment you’ll solve the basic economic order quantity (EOQ) model in Excel using two methods: (A) a trial-and-error approach to find a very good but approximate answer, and (B) the EOQ formula to find the “exact” answer. Set up your spreadsheet similar to that shown below. The situation: Roxie is responsible for purchasing the paper used in all copiers and laser printers at Budco. After looking at her records, Roxie has found that demand for paper averages 600...
q1 The continuous review economic order quantity (EOQ) inventory model operates using two model parameters. These...
q1 The continuous review economic order quantity (EOQ) inventory model operates using two model parameters. These two parameters are: Select one: a. Q, which represents a fixed order quantity and R, which represents a variable reorder point quantity of inventory. b. Q, which represents a variable order quantity and R, which represents a fixed reorder point quantity of inventory. c. Q, which serves as the amount of inventory that triggers the release of an order and R, which is the...
Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15 Item...
Consider a basic economic order quantity (EOQ) model with the following characteristics: Item cost: $15 Item selling price: $20 Monthly demand: 500 units (constant) Annual holding cost: $1.35 per unit Cost per order: $18 Order lead time: 5 working days Firm's work year: 300 days (50 weeks @ 6 days per week) Safety stock: 15% of monthly demand For this problem, determine the values of: Q* the optimal order quantity and reorder point. Select one: a. 400 and 100 b....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT