Variations in setup costs, holding costs, and demand usually make relatively modest differences in total cost because the EOQ model is robust.

Question

Quizplus · Accepted Answer

The EOQ model is designed to find the optimal order quantity that minimizes the total cost by balancing the setup cost and holding cost. Although variations in setup costs, holding costs, and demand can affect the outcome, the EOQ model is considered robust and can still provide a good estimate of the optimal order quantity. Therefore, the statement is true.

Variations in Setup Costs, Holding Costs, and Demand Usually Make