Which of the following is NOT an assumption of the EOQ model? a. It is possible to receive a purchase discount if the order quantity is sufficiently large. b. There is a fixed cost to submit each order that is independent of the amount ordered. c. Demand occurs at a constant rate per unit of time. d. There is a cost to hold each unit of inventory per unit of time.

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Answer 1

Textbook Question

Chapter 12, Problem 1CQ

Which of the following is NOT an assumption of the EOQ model?

a. It is possible to receive a purchase discount if the order quantity is sufficiently large.
b. There is a fixed cost to submit each order that is independent of the amount ordered.
c. Demand occurs at a constant rate per unit of time.
d. There is a cost to hold each unit of inventory per unit of time.

Expert Solution & Answer

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

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Students have asked these similar questions

Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 70 units and is valued at $90 per unit. Inbound shipments from vendor 1 will average 390 units with an average lead time (including ordering delays and transit time) of 4 weeks. Inbound shipments from vendor 2 will average 490 units with an average lead time of 2 weeksweeks. Ruby-Star operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. Part 2 a. The average aggregate inventory value of the product if Ruby-Star used vendor 1 exclusively is $enter your response here.

Sam's Pet Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: > Demand 75 bags/week > Order cost = $52.00/order > Annual holding cost = 20 percent of cost > Desired cycle-service level = 80 percent >Lead time = 5 weeks (30 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 75 bags is incorrect and actual demand averages only 50 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 2,250 rolls. The cost per roll is $625, and the annual holding cost is 20 percent of the cost. Each order costs $75. a. How many rolls should Yellow Press order at a time? Yellow Press should order rolls at a time. (Enter your response rounded to the nearest whole number.)

Answer 2

Textbook Question

Chapter 12, Problem 1CQ

Which of the following is NOT an assumption of the EOQ model?

a. It is possible to receive a purchase discount if the order quantity is sufficiently large.
b. There is a fixed cost to submit each order that is independent of the amount ordered.
c. Demand occurs at a constant rate per unit of time.
d. There is a cost to hold each unit of inventory per unit of time.

Expert Solution & Answer

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

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Answer 3

Textbook Question

Chapter 12, Problem 1CQ

Which of the following is NOT an assumption of the EOQ model?

a. It is possible to receive a purchase discount if the order quantity is sufficiently large.
b. There is a fixed cost to submit each order that is independent of the amount ordered.
c. Demand occurs at a constant rate per unit of time.
d. There is a cost to hold each unit of inventory per unit of time.

Expert Solution & Answer

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

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Answer 4

Textbook Question

Chapter 12, Problem 1CQ

Which of the following is NOT an assumption of the EOQ model?

a. It is possible to receive a purchase discount if the order quantity is sufficiently large.
b. There is a fixed cost to submit each order that is independent of the amount ordered.
c. Demand occurs at a constant rate per unit of time.
d. There is a cost to hold each unit of inventory per unit of time.

Expert Solution & Answer

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

Answer 8

Expert Solution & Answer

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To identify: The feature that is not an assumption of the EOQ model.

Answer 12

Explanation of Solution

Correct option: (a)

Correct answer:

It is possible to receive a purchase discount if the order quantity is sufficiently large.

Justification:

Economic order quantity (EOQ) is the optimum purchase quantity of an item at a single point during a period to minimum the annual cost for ordering and carrying the items in inventory. It is also known as the optimum lot size. The above assumption is not true with regards to the EOQ model because, the EOQ is always calculated under the assumption that there are no purchase quantity discounts unless otherwise they are explicitly mentioned by the seller.

Answer 13

Ch. 12 - Which of the following is NOT an assumption of the...Ch. 12 - Prob. 2CQ Ch. 12 - Prob. 3CQ Ch. 12 - If the order quantity doubles but the flow rate...Ch. 12 - Prob. 5CQ Ch. 12 - Prob. 6CQ Ch. 12 - Prob. 7CQ Ch. 12 - Prob. 8CQ Ch. 12 - Prob. 9CQ Ch. 12 - Prob. 1PA

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