The fixed order interval EOQ model is best used for SKUs with:
A) variable demand.
B) stable demand.
C) unknown demand.
D) seasonal demand.

Question

Quizplus · Accepted Answer

The fixed order interval EOQ model is best used for SKUs with stable demand because it assumes a constant demand rate over time. This makes it easier to estimate holding costs and ordering costs, which are necessary inputs for calculating the economic order quantity (EOQ) and the optimal order interval. This model may not be effective for SKUs with variable or unknown demand, as these may require more complex forecasting methods. Additionally, seasonal demand may require adjustments to the fixed order interval to prevent stockouts or overstocking during peak periods.

The Fixed Order Interval EOQ Model Is Best Used for SKUs