Question: Q2. ( 5 pts.) In the basic EOQ model, if the cost of placing an order doubles and unit cost reduces by half , and

Q2. (5 pts.) In the basic EOQ model, if the cost of placing an order doubles and unit cost reduces by half, and all other values remain constant, the EOQ will:

a) increase by about 41%.

b) increase by 100%.

c) increase by 200%.

d) increase, but more data is needed to say by how much.

e) either increase or decrease.

f) None of the above.

Q3. (5 pts.) In the basic EOQ model, if Demand is 3000 per month, Fixed cost is $200 per order, unit cost is $50, and holding cost per year as a fraction of unit cost is 5%., what is the economic order quantity?

a) About 700

b) About 1400

c) About 2400

d) About 1000

e) About 2000

f) None of the above

Q4. (5 pts.) Reconsider the Q3, what is the optimal ordering frequency?

a) About 15

b) About 25

c) About 20

d) About 8

e) About 4

f) None of the above

Q5. (5 pts.) Reconsider the Q3, what is the cycle time in months?

a) About 3

b) About 4

c) About 5

d) About 2

e) About 1

f) None of the above

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