In the EOQ model,determining the optimal order quantity requires us to ______.
A)increase number of orders along with quantity ordered at any time
B)strike a balance between quantity and quality of materials ordered
C)strike a balance between ordering and holding costs
D)increase number of orders depending on the volume discounts provided

Question

Quizplus · Accepted Answer

The EOQ model aims to find the optimal order quantity that balances the costs of placing an order (ordering costs) and holding inventory (holding costs). Therefore, in order to determine the optimal order quantity, a balance must be struck between ordering and holding costs. Options A, B, and D may not necessarily lead to the optimal order quantity.

In the EOQ Model,determining the Optimal Order Quantity Requires Us