Assignment: Economic Order Quantities (EOQ)

1. What are the four (4) assumptions on which Economic Order Quantities are based, (in detail)?

2. For what kinds of items are these assumptions valid? When are they not valid? Why not?

3. What are the relevant costs to be considered when deciding whether to take a quantity discount?

4. What are the key trade-offs in determining the Economic Order Quantity?

5.How is EOQ calculated?

6. On what basis should the final decision be made?

Graphs may be included in your responses if so desired.