In some inventory models, the optimal behavior occurs when ordering costs and carrying costs are equal to one another. Provide an example of a model where this rule does not hold; explain how the model's results are optimal anyway
What will be an ideal response?
This rule will not hold in all instances of the quantity discount model. In order to take advantage of a discount, it may be cheaper to order a quantity that is not an EOQ. The goal in quantity discount models is to minimize the sum of ordering, carrying, and product costs.
You might also like to view...
Which of the following is not a general category of shareholders' equity?
A) Net income B) Contributed capital C) Noncontrolling interest D) Earned capital
Identify three reasons social media are rarely the only source of communications for a brand
What will be an ideal response?
Transcribing data involves transferring the coded data from the questionnaires or coding sheets onto disks or directly into computers by key punching or other means
Indicate whether the statement is true or false
What advice would you give a new organizational board member?
What will be an ideal response?