What will the EOQ be in the basic EOQ model, if the cost of placing - ProProfs Discuss
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What will the EOQ be in the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant?



A. Increase by about 41%
B. Increase by 100%
C. Increase by 200%
D. Increase, but more data is needed to say by how much
E. Either increase or decrease

This question is part of MGMT 318-Chapter 12
Asked by Lukeg, Last updated: Jul 01, 2020

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2 Answers

E. Stanley

E. Stanley, Technical writer, Indianapolis

Answered Feb 21, 2019

The EOQ model is also known as the Economic Order Quantity Model. This is a type of model that shows that the demand is constant and that the inventory is placed at a fixed rate until such time when it reaches O. Based the given wherein the cost of placing orders will become doubles while the other values will remain the same, this means that the EOQ will increase by 41%.

The EOQ is normally used when the right quantity has to be found and this is the quantity that will be in charge of minimizing the sum of all of the costs. This can sometimes measure the accounting storage and the ordering costs.

 

John Smith

John Smith

Answered Mar 06, 2017

A) increase by about 41%
 

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