Basic economic order quantity model , Finance Basics

Basic economic order quantity (EOQ) model 

This model is one of the oldest and most commonly used in inventory control. It is based on a number of assumptions: 

  • The demand for the item is known, constant and independent of the demand for other items
  • The lead time (time between ordering and receipt) is known and fixed
  • The receipt of the order occurs in a single instant and not over a period of time
  • Quantity discounts are not calculated as part of the model
  • The only costs that may vary within the model are the costs of ordering (or setting up a machine if the item is manufactured) and the storing or holding cost of the item ?
  • Stock outs or shortages do not occur.
Posted Date: 3/14/2013 5:45:59 AM | Location : United States

Related Discussions:- Basic economic order quantity model , Assignment Help, Ask Question on Basic economic order quantity model , Get Answer, Expert's Help, Basic economic order quantity model Discussions

Write discussion on Basic economic order quantity model
Your posts are moderated
Related Questions
Explain about the New Issue Market OR Primary Market New issue market is the segment in which new issues are made. In new issue market, new issues may be made in 3 ways name

Draw the network diagram of the following project according to the activity list and relationships mentioned below Table 1 Activity Du

Percentage of Sales Method A) Express the various balance sheet items varying along with sales as percentage of sales as assume for year 2002 stock and net fixed assets amoun

IRR or Internal Rate of Return This method is a discounted cash flow technique that uses the principle of NPV.  It is described as the rate such equates the present value of c

Dividend Cover Ratio Dividend cover = EPS/ DPS = Earning to ordinary shares/Dividend paid       This signifies the number of times dividend can be paid from earnin

What is the effective annual cost of skipping the discount and paying at the end of the net period for the following credit terms: 6/10, net 70? please show work"

Question: Company XYZ currently operates a General Insurance company and would like to start selling life insurance products. The intended market is composed of both financial

what is bank draft?How it can be prepared?

Social responsibility - Objectives of Business Entity The firm must decide where to operate strictly in their shareholders' best interests or be responsible to their staff, th

Objectives or Goals of Business 1. Profit maximization - This is a traditional and a cardinal objective of a business.  This is so for the following purpose: To