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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.
How we constract the cost structure of firms
Economic appraisal - Appraisal , which seeks to quantify, and where possible calculate the welfare impacts from, the costs and benefits of a project or policy.
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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 inve
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