The primary purpose of the basic economic order quantity model shown below is Q* = $\sqrt { \frac { 2 \cdot D \cdot S } { H } }$
A) to calculate the reorder point, so that replenishments take place at the proper time
B) to minimize the sum of carrying cost and holding cost
C) to maximize the customer service level
D) to minimize the sum of setup cost and holding cost
E) to calculate the optimum safety stock

Question

Quizplus · Accepted Answer

The basic Economic Order Quantity (EOQ) model aims to minimize the total costs associated with ordering and holding inventory, specifically the setup (or ordering) costs and the holding (or carrying) costs.

The Primary Purpose of the Basic Economic Order Quantity Model 2⋅D⋅SH\sqrt { \frac { 2 \cdot D \cdot S } { H } }H2⋅D⋅S​​

The Primary Purpose of the Basic Economic Order Quantity Model $\sqrt { \frac { 2 \cdot D \cdot S } { H } }$