Question: As demand increases, the EOQ would grow as a function of the square root of the change in demand (assume that ordering and holding costs

 As demand increases, the EOQ would grow as a function of

As demand increases, the EOQ would grow as a function of the square root of the change in demand (assume that ordering and holding costs remain constant). ABC Inc sees that its demand for a particular SKU has increased from 5000 to 8000 per year while it's order quantitiy has grown by 70% in the same period of time. Is the inventory manager doing a good job managing that SKU, assuming that all other factors have remained constant. EOQ=sqrootof[(2DS)/H] Where: D= annual demand in units S= cost of placing 1 order; H= cost of holding 1 unit of that item in inventory for 1 year Yes Cannot say No

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!