The profits of Dunkin' Donuts are down by a quarter.The management believes this is because of the high cost of the raw materials being used.Matt,the operations manager,should use the ________ model so that total inventory costs are minimized.
A) DLC
B) EOQ
C) IQA
D) TPM

Question

Quizplus · Accepted Answer

EOQ (Economic Order Quantity) model is used for inventory management and is suited to minimize total inventory costs. As the problem states, the high cost of raw materials is affecting profits, which means the inventory costs are high. EOQ helps in finding the optimal order quantity that minimizes total inventory costs. Therefore, for the given problem, Matt should use the EOQ model.

The Profits of Dunkin' Donuts Are Down by a Quarter