The EOQ model with quantity discounts attempts to determine:
A) the lowest purchasing price.
B) whether to use a fixed-quantity or fixed-period order policy.
C) how many units should be ordered.
D) the shortest lead time to use.
E) the lowest amount of inventory necessary to satisfy a certain service level.

Question

Quizplus · Accepted Answer

The EOQ model with quantity discounts attempts to determine the optimal order quantity (i.e., how many units should be ordered) for different quantity discount levels. This is done by comparing the total cost of ordering and holding inventory at each level of discount and choosing the one that minimizes the total cost. The other options listed are not the primary objective of this model.

The EOQ Model with Quantity Discounts Attempts to Determine