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In Inventory Management? a. economic order quantity model is used to forecast order sizes b. economic order quantity model is not used because it is used in economics c. economic order quantity model is used to calculate sales price of items
a. economic order quantity model is used to forecast order sizes
Answer is A
Perfect answer for this Question is A) economic order quantity model is used to forecast order sizes.
But it also helps in deciding Sale price (only Valid if cost Mark-up Technique is used) as it defines minimum holding cost which is one the important part of total Cost. If total cost varies sale price varies.
E.g. (Other Cost20 + holding Cost10 = Total Cost30 x Mark-up10% = Sale Price33)
E.g. (Other Cost20 + holding Cost5 = Total Cost25 x Mark-up10% = Sale Price27.5)
Therefore Option C is also Correct.
absolutely correct, i agree.
Option A is Correct: Economic order quantity (EOQ) is the order quantity that minimizes total inventory holding costs and ordering costs
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