ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When using EOQ ordering, the order quantity must be computed in every order cycle
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True
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False
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -T/F When using EOQ ordering, the order quantity must be computed in every order cycle. False. Unless demand, holding cost, or ordering cost changing, the order quantity will not change.
Detailed explanation-2: -To calculate the economic order quantity, you will need the following variables: demand rate, setup costs, and holding costs. The formula is: EOQ = square root of: [2(setup costs)(demand rate)] / holding costs.
Detailed explanation-3: -Which is not a true assumption in the EOQ model? No more than three items are involved.
There is 1 question to complete.