Which if the following is NOT seen as an advantage of the EOQ and EBQ models?
A) The models give an indication of the batch size for each order.
B) The cost of stock is accurately incorporated in the models.
C) Small errors will not significantly affect the total cost of near optimum order quantity.
D) The models give a useful indication of how often to order.

Question

Quizplus · Accepted Answer

The EOQ (Economic Order Quantity) and EBQ (Economic Batch Quantity) models primarily focus on minimizing the total costs associated with ordering and holding inventory. While they do provide insights into optimal order sizes and frequencies, they do not accurately incorporate the cost of stock itself, such as the cost of goods or the value of the items being held in inventory. These models are more concerned with the costs of ordering and holding inventory (like storage and ordering costs) rather than the direct cost of the inventory items.

Which If the Following Is NOT Seen as an Advantage