1.

The basic EOQ model is quite robust (works reasonably well in many scenarios) because:

		It accounts for variable demand and variable lead time
		The flat bottomed total cost curve implies that straying away a little from the EOQ number would not increase costs significantly
		The assumptions of the basic EOQ model are met reasonably well in most businesses.
		It is quite easy to account for holding and ordering costs

2.

What is likely to most immediately happen to the EOQ when working capital interest rates increase?

		The need for establishing EOQ will be eliminated
		EOQ will increase
		EOQ will not be affected
		EOQ will decrease

3.

Sales of hot dogs at the corner of 24^th and Lex. follow the following patterns: 30% of the days, 80 are sold; 40% of the days, 90 are sold; and the remaining days, 100 are sold. Given the vendor plans to stock 90 each day,

What approx. expected CSL is the vendor targeting?

		82%
		60%
		70%
		90%

4.Instead of following the EOQ prescription of 150 pieces/order, a company orders 200 pieces at a time. This action would typically result in:

		Lower total ordering cost and lower total holding cost
		Higher total ordering cost, but lower total holding cost
		Higher total ordering cost and higher total holding cost
		Lower total ordering cost, but higher total holding cost