ECONOMIC ORDER QUANTITY

Most inventory models attempt to minimize....

• The likelihood of a stockout

• The number of items ordered

• Total inventory based costs

• The number of orders placed

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will...

• increase by about 41%

• increase by 100%

• increase by 200%

• either increase or decrease

Which of the following statements about the basic EOQ model is true?

• If the ordering cost were to double, the EOQ would rise.

• If annual demand were to double, the EOQ would increase.

• If the carrying cost were to increase, the EOQ would fall.

• All of the above statements are true.