OPERATIONS MANAGEMENT W/ 360 DAY CONNECT
2nd Edition
ISBN: 9781266763212
Author: CACHON
Publisher: MCG
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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
1) View the video Service Processing at BuyCostumes (10.41 minutes, Ctrl+Click on the link); what are your key takeaways (tie to one or more of the topics discussed in Chapter 3) after watching this video. (viddler.com/embed/a6b7054c)
Note: As a rough guideline, please try to keep the written submission to one or two paragraphs.
2) Orkhon Foods makes hand-held pies (among other products). The firm’s weekly sales of hand-held pies over the past seven weeks are given in the table. The firm’s operations manager, Amarjargal, wants to forecast sales for week 8.
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2
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Forecast the week 8 sales using the following approaches:
a) Naïve approach
b) 5-month moving average
c) 3-month weighted moving average using the following weights: 0.50 for week 7, 0.30 for week 6, and 0.20 for week 5.
d) Exponential smoothing using a smoothing constant of 0.30, assume a week 2…
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What area of emotional intelligence refers to the ability to manage your emotions, particularly in stressful situations, and maintain a positive outlook despite setbacks?
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Chapter 12 Solutions
OPERATIONS MANAGEMENT W/ 360 DAY CONNECT
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