Based on case study of Managing Inventories at ALKO Inc., following statement(s) is(are) true regarding model building/development or model determination. "there are more than one answers"

a. EOQ assumes that demand is known and constant, ALKO's demand is not constant. So, ROP will vary (cannot be determined)

b. EOQ assumes that the demand is known and constant, ALKO's demand is not constant. So, the quantity to order must be adjusted by adding safety stock.

c. Since ALKO's demand is not constant, periodic review policy (interval review model) cannot be applied.

d. Since ALKO's demand is not constant, CSL must be set in order to determine OUL

e. Since ALKO's demand is not constant, OUL = ROP + Safety Stock when periodic review policy is applied

Answer rating: 100% (QA)

Based on the case study it appears that statement a is true E O Q does assume that demand is known a... View the full answer