The annual shortage cost in an economic order quantity (EOQ) model with shortages allowed is pb2/Q.

Name: The annual shortage cost in an economic order quantity (EOQ) model with shortages allowed is pb2/Q.
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Quizplus · Accepted Answer

The annual shortage cost in an EOQ model with shortages allowed is typically calculated as the product of the shortage cost per unit per year, the average number of units short, and the number of orders per year, not as pb2/Q.

The Annual Shortage Cost in an Economic Order Quantity (EOQ)