The basic eoq model-the deterministic models, Managerial Accounting

Assignment Help:

THE BASIC EOQ MODEL

This is the most simple of all the models discussed. In addition to the general assumptions which relate to all deterministic models (i.e. certainty of all parameters) it is further assumed that:

a. Demand is continuous and constant over time.
b. That suppliers lead time is zero i.e. stocks are delivered immediately on the day the order is made.
c. That stock-outs are not permitted.
d. There are no massiveness quantity discounts.
e. Holding costs per unit, ordering costs per order and costs per unit are constant.
   
Relevant costs of basic EOQ model:

The related costs that must be considered when determining optimum inventory levels can be classified into two categories:

(i) Ordering costs.
(ii) Holding (Carrying) Costs.

That is, TC = Ordering Costs + Holding Costs


Related Discussions:- The basic eoq model-the deterministic models

Transfer pricing with third party consequences, Transfer pricing with third...

Transfer pricing with third party consequences Transfer prices are used not only for internal record keeping and performance evaluation purposes. There are several settings

Which of the following costs is an example of a cost, Which of the followin...

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Costs classification, identify and explain the many classification of costs...

identify and explain the many classification of costs for planning, control.performance evaluation and decision making.

Disadvantages of simulation, Disadvantages of Simulation 1) Although al...

Disadvantages of Simulation 1) Although all models are simplification of reality, they may still be complex and require a substantial amount of managerial and technical time.

State the price determination under the market condition, State the price d...

State the price determination under the market condition The price determination under the following market condition is as follows: 1) Pure competition: in this situation

Decision making, A local government authority owns and operates a leisure c...

A local government authority owns and operates a leisure centre with numerous sporting facilities, residential accommodation, a cafeteria and a sports shop. The summer season lasts

Case study, yolande tzar came to norethen ireland

yolande tzar came to norethen ireland

Explanation of objectives of budgetary control system, Problem 1 Manage...

Problem 1 Management accounting is sensitive to management needs; however, it assists the management and does not replace it. Write down in detail the scope of management accou

Compute the expected return and risk of a portfolio, Compute the Expected R...

Compute the Expected Return and Risk of a Portfolio? The subsequent data are presented to you as a portfolio manager Security Expected Return

What is the issue price for bond a and b, Q. What is the issue price for Bo...

Q. What is the issue price for Bond A and B ? On December 31, 20x7, the Jill Corporation issued $20,000,000 of 15 year face value bonds. The bonds pay interest on June 30 and D

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd