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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.
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.
Sales of Cool-Man air conditioners have increase steadily during the past five years: Year Sales 1 450 2 495 3 518 4 563 5 584 6 ?
Analysis Various business decisions have recurrent themes: whether to the outsource production or to the support functions, what level of production and pricing to establish, w
Absolute liquid ratio - Liquidity ratios Although receivables debtors and bills receivable are usually more liquid than inventories yet there may be doubts regarding their rea
1.The acquisition of Company B was financed by Company A with cash and by issuance of 2M common shares for $100M. Company A forgot to record the stock issuance
Explain product cost Product costs are those costs which are associated with and directly identifiable with the product. In other words, which are assigned to the product are p
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Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru
Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables
Account analysis (Inspection of accounts) method: This method requires that departmental managers and the accountant inspect each item of expenditure within the accounts for s
Various stages of product life cycle Typically the life cycle of a manufactured product will consist of the following stages: 1) market research : before any investment in
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