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

Question

Quizplus · Accepted Answer

The EOQ model with quantity discounts aims to determine the optimal order quantity for multiple price breaks. Thus, it seeks to find the number of units to order that will minimize total inventory costs, including ordering costs and holding costs, while taking into account the discounts offered for larger order quantities. Therefore, the correct choice is D, how many units should be ordered.

The EOQ Model with Quantity Discounts Attempts to Determine