ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The following is the limitations of EOQ MODEL
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Demand may very through out the year
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It assumes that the shortage space is unlimited
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Prices of material change through out the year
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All of the above
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Explanation:
Detailed explanation-1: -∴ So, stochastic demand is not an underlying assumption of the basic EOQ model.
Detailed explanation-2: -Economic Order Quantity is the ideal order quantity a company should purchase for its inventory. This order quantity is that order quantity which minimizes the total holding cost and ordering cost. Was this answer helpful?
Detailed explanation-3: -All items in your warehouse are not of equal value The EOQ model, however, treats all inventory items the same, regardless of their value to the business. It assumes you need to stock every item with equal importance and assumes that every item has fixed costs that never fluctuate.
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