Question: 4. The variable cost rises slowly around the EOQ, and the analysis is based on a series of assumptions and approximations. Why, then, do we

4. The variable cost rises slowly around the EOQ, and the analysis is based on a series of assumptions and approximations. Why, then, do we bother with the calculations rather than allowing inventory managers to design policies based on their experience? Would they get good results without bothering with the formal analysis? 2. What costs are incurred by holding stock? How would you set about finding these? Why are shortage costs so difficult to find? valid

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