Question 1

To what type of inventory does the EOQ model apply?

Accepted Answer

"The concept of economic order quantity (EOQ)applies to inventory items that are replenished in batches or orders and are not produced and delivered continuously."

Question 2

More inventory in the plant means that less control is needed since the chance of running out is much lower.

Accepted Answer

A) True 
 B)False  False

Question 3

In the Economic Order Quantity Model,what effect would a change in the cost of goods have on decisions such as when to restock or how much to stock as inventory for a company? Why?

Accepted Answer

It would have no impact because the cost of an item is not used in the EOQ calculations.

Question 4

At the optimal order quantity,total annual holding cost will equal total annual order cost.

Accepted Answer

A) True 
 B)False

Question 5

With the basic EOQ model,we want stock replenishment to arrive exactly when the inventory drops to zero.

Accepted Answer

A) True 
 B)False

Question 6

What are the advantages of implementing the EOQ model?

Accepted Answer

"The advantages are,effective

Question 7

Which of the following is not an assumption of the basic EOQ model?

Accepted Answer

A) Rate of demand is constant 
B) Shortages are not allowed 
C) Delivery is gradual 
D) Lead times are known with certainty 
E) Purchase price,ordering cost,and per‐unit holding cost are independent of quantity ordered
F)Items are ordered independently of each other 
A) Rate of demand is constant 
B) Shortages are not allowed 
C) Delivery is gradual 
D) Lead times are known with certainty 
E) Purchase price,ordering cost,and per‐unit holding cost are independent of quantity ordered
F)Items are ordered independently of each other

Question 8

At the economic order quantity,what is the relationship between annual holding cost and annual order cost?

Accepted Answer

A) Annual holding cost is less than annual order cost 
B) Annual holding cost equals annual order cost 
C) Annual holding cost is greater than annual order cost 
D) There is no relationship 
E) It depends on annual demand 
A) Annual holding cost is less than annual order cost 
B) Annual holding cost equals annual order cost 
C) Annual holding cost is greater than annual order cost 
D) There is no relationship 
E) It depends on annual demand

To what type of inventory does the EOQ model apply?

More inventory in the plant means that less control is needed since the chance of running out is much lower.

In the Economic Order Quantity Model,what effect would a change in the cost of goods have on decisions such as when to restock or how much to stock as inventory for a company? Why?

At the optimal order quantity,total annual holding cost will equal total annual order cost.

With the basic EOQ model,we want stock replenishment to arrive exactly when the inventory drops to zero.

What are the advantages of implementing the EOQ model?

Which of the following is not an assumption of the basic EOQ model?

At the economic order quantity,what is the relationship between annual holding cost and annual order cost?

Operations and Supply Chain Strategy for Competitiveness

Executing Strategy: Project Management

Process Planning

Capacity and Scheduling

Supply Chain Planning and Analytics

Supply Chain Management

Monitoring and Controlling the Processes

Process Improvement: Six Sigma

Process Improvement: Lean

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Exam 7: the Economic Order Quantity Model

To what type of inventory does the EOQ model apply?

More inventory in the plant means that less control is needed since the chance of running out is much lower.

In the Economic Order Quantity Model,what effect would a change in the cost of goods have on decisions such as when to restock or how much to stock as inventory for a company? Why?

At the optimal order quantity,total annual holding cost will equal total annual order cost.

With the basic EOQ model,we want stock replenishment to arrive exactly when the inventory drops to zero.

What are the advantages of implementing the EOQ model?

Which of the following is not an assumption of the basic EOQ model?

At the economic order quantity,what is the relationship between annual holding cost and annual order cost?

Operations and Supply Chain Strategy for Competitiveness

Executing Strategy: Project Management

Process Planning

Capacity and Scheduling

Supply Chain Planning and Analytics

Supply Chain Management

Monitoring and Controlling the Processes

Process Improvement: Six Sigma

Process Improvement: Lean

Filters