In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will:OA. increase, but more data is needed to say by how much.OB. increase by 100%OC. increase by about 41%.OD. increase by 200%.OE. either increase or decrease.

Let us assume that the initial order cost as "x" Now if we double the order cost it will be "2x" The…

Answered: In the basic EOQ model, if the cost of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Similar questions

A demand driven model will likely lead to higher inventory levels due to safety stock. True False
Which of the following statements is false? a. Ordering in smaller lot sizes lead to lower inventory holding costs. b. Seasonal inventory is stored to cater predictable surge in demand. c. Cycle inventory is the average amount of inventory used to satisfy demand between replenishments. d. Safety inventory is kept when the demand is less than supply.
The Fed increases the interest rate suddenly, leading to a sharp and immediate increase in loan interest rates. How will the EOQ behave in the immediate/short run? Assume all other variables stay relatively unchanged in the immediate term. EOQ = Sq root of [(2D*S)/H] D = annual demand in units S = cost of placing 1 order; H = cost of holding 1 unit of that item in inventory for 1 year EOQ will not be affected EOQ will increase EOQ will decrease
Which of the following would be considered a direct holding cost? (choose all that apply)
A manufacturer’s annual demand is 6000 units. The current units per order is $100. The setup cost is $50 per order and the holding cost is $7 per unit. The cost per unit is $2.50. The Number of work days is 250 per year. What is the annual setup cost? What is the annual holding cost? What is the optimal order quantity (EOQ)? Using the EOQ, how many orders should be placed per year? What is the interval between orders? What is the inventory administration cost? What is the total cost of inventory?
A firm practices a level strategy with 700 units per quarter and the remainder by subcontracting. Demand over the next four quarters is estimated to be 700, 900, 1200, and 600. The total number of subcontracting units is ----- units.
A manufacturing company faces an uncertain demand for its product at an average of 10,000 units per year. Selling price of the product is IDR. 1.500.000,-. The cost of holding per unit per year is estimated at ID. 350.000,-. Profit of the product is IDR. 300,000,- per unit. If the company could not meet the demand, then the profit will be lost. Ordering lead time is approximately 7 days, and the demand during lead time follows a uniform distribution of 30 to 200 units. a. Determine order quantity and reorder points to minimise the total cost b.Determine the review period and maximum inventory to minimise the total cost
Which of the following is incorrect about the safety stock? Group of answer choices As the amount of safety stock carried increases, service level increases As the amount of safety stock carried increases, the risk of stock-out decreases If there is no uncertainty, there is no need to keep safety stock As the amount of safety stock carried increases, the risk of stock-out increases Safety stock protects companies against uncertainty
ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings. A True B False

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In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will: OA. increase, but more data is needed to say by how much. OB. increase by 100% OC. increase by about 41%. OD. increase by 200%. OE. either increase or decrease.