Sensitivity analysis of eoq model, Managerial Accounting

SENSITIVITY ANALYSIS OF EOQ MODEL

Sensitivity Analysis is regarded with the manner in which those results of solutions change in response to change in model parameters.

1759_Untitled.jpg


It is important to appreciate that in formulating our inventory models, we have really been performing a planning exercise. Thus we have made certain assumptions and estimates (e.g. annual demand D, holding costs H, & ordering costs O) and out solutions have obviously been affected by these. When for example calculating a deterministic EOQ value with maximization of total inventory costs as the objective, expected annual demand (D) is taken into account. If we subsequently find that annual demand has differed from that expected then we will find that the EOQ we selected was not the optimum and, as an outcome, the total inventory cost was not really minimum.

Posted Date: 12/6/2012 6:44:03 AM | Location : United States







Related Discussions:- Sensitivity analysis of eoq model, Assignment Help, Ask Question on Sensitivity analysis of eoq model, Get Answer, Expert's Help, Sensitivity analysis of eoq model Discussions

Write discussion on Sensitivity analysis of eoq model
Your posts are moderated
Related Questions
1. In order to boost the housing market throughout 2009 and into 2010, the federal government offered a tax credit to first-time home buyers and some repeat buyers.

advantage and disadvantage of incremental budget

Question 1: (a) Use indifference curves to distinguish between income and substitution effects. (b) Hence, using the above techniques explain why the demand curve slope down

major ways that these complexities might impact a business

CONSULTING PROJECT Pricing and Production Decisions at PoolOut Ltd  PoolOut Ltd manufactures and sells a single product called the "RainIn", which is a patent-protected au

Explain the Break-Even Analysis  The study of cost volume profit analysis is often referred to as break-even analysis and the two terms are used interchangeably by many. This i

Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables

Cost Analysis purposes For purposes of cost analysis, the desegregation of the generic value chain into individual value activities should reflect three principles that are not

disadvantages of transfer pricing

I want some to solve my process costing problem solved