When determining the Economic Order Quantity (EOQ)with quantity discounts,which cost is included in addition to the costs considered in the basic EOQ formulation?
A)Cost of packing the item
B)Safety stock cost
C)Per-unit cost of the item
D)Inventory cycle count cost

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) model with quantity discounts includes the per-unit cost of the item in addition to the holding costs, setup costs, and demand rate considered in the basic EOQ formulation. Quantity discounts can affect the total cost by reducing the per-unit cost when larger quantities are ordered, thus impacting the overall EOQ calculation.

When Determining the Economic Order Quantity (EOQ)with Quantity Discounts,which Cost