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

Explain programmer budgeting according to burkhead, Explain Programmer budg...

Explain Programmer budgeting According to burkhead According to burkhead a program budget serves a different purpose than performance budget. A performance budget is useful fo

Capital budgeting – planning investments, The management of Popular Stores ...

The management of Popular Stores Sdn. Bhd. are in the process of exploring the company’s investment opportunities.

Absorption and marginal costing, opening stock unit were 8500 and closing s...

opening stock unit were 8500 and closing stock units were 6750.frofit of 61200 using managerial costing.fixed overhead absorbed rate was 3 pr unit.what is the profit using absorpti

cost per equivalent unit was determined , The Ragan Corporation uses a pro...

The Ragan Corporation uses a process cost system. The company started March with 2,300 units in Work in Process-Dept. A. During the month 4,000 units were started. At the end of th

Interpreting the simplex tableau- sensitivity analysis, INTERPRETING THE SI...

INTERPRETING THE SIMPLEX TABLEAU We can now see that our attention must be directed to reading, interpreting and analyzing the (simplex) results. It is erroneous, however, to a

Accounting rate of return - arr, ARR gives a fast estimate of a project's v...

ARR gives a fast estimate of a project's value over its useful life. ARR is derived by determining profits before taxes and interest.   ARR is an accounting technique used fo

Assigning costs and assets , Assigning Costs and Assets After identify...

Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act

Cost-volume profit analysis , COST-VOLUME PROFIT (C-V-P) ANALYSIS INTRODUCT...

COST-VOLUME PROFIT (C-V-P) ANALYSIS INTRODUCTION You can employ cost-volume-profit analysis to examine the natural relationship among cost, volume, and profit in pricing decision

How will you develop its presentation to appropriate markets, we want to re...

we want to realize our job dreams, we need to think about ourselves as products to be marketed, and in order to do this, we need to contextualize ourselves within the five Ps of ma

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