Eoq formula, Microeconomics

EOQ formula 

The EOQ equation assumes demand is constant and steady. It also assumes that demand for different items is independent. This is inappropriate for controlling inventories in intermittent systems of assembled products where demand for lower level items is dependent on demand for finished goods. Consider the Ford Motor Company.

Demand for wheels or tyres are very much related to the demand for engines. So for components and raw materials it is wrong to apply the EOQ model.

Posted Date: 3/14/2013 6:14:23 AM | Location : United States







Related Discussions:- Eoq formula, Assignment Help, Ask Question on Eoq formula, Get Answer, Expert's Help, Eoq formula Discussions

Write discussion on Eoq formula
Your posts are moderated
Related Questions
what is International Cartels and Commodity Agreements? Describe briefly International Cartels and Commodity Agreements, what are Commodity agreements?

Select a news article dated within the previous two months and analyze the issue using the economic concepts and theory learned in this class

draw the total revenue curve and the total cost curve showing the profit maximizing level

suppose the production function is given as:X=b0Lb1Kb2,where b0=level of technology find marginal product of factors(MPL0and MPK) find factor intensity

How might a country exchange rate influence the balance of payments? Definition of the exchange rate; price of domestic currency in another (basket of) currency (currencies). C

using the marginal utility approach discuss how economic theory explains the optimum pattern of consumption for an individual consumer

a) Explain the conditions under which a monopolist is able to price discriminate. b) Demonstrate the relationship between a firm's marginal revenue function and its relationship

discuss and illustrates the following terms with diagrams1.inferior goods.2.normal goods,3.giffen goods

Commodities that are viewed as luxuries typically have price elastic demand, and commodities that are requirements have price inelastic demand.  There is easily no substitute for a