The annual shortage cost in an economic order quantity (EOQ)model with shortages allowed is pb²/Q.

Name: The annual shortage cost in an economic order quantity (EOQ)model with shortages allowed is pb 2 /Q.
Brand: Quizplus
Rating: 4.7 (41 reviews)

Question

Quizplus · Accepted Answer

The annual shortage cost in an EOQ model with shortages allowed is typically calculated using the formula (b * (Q - D)) / 2, where b is the backorder cost per unit, Q is the order quantity, and D is the demand. The given formula is incorrect.

The Annual Shortage Cost in an Economic Order Quantity (EOQ)model