The total cost in the EOQ is ______.
A)insensitive to minor deviations in the order quantity from the EOQ amount
B)sensitive to minor deviations in the order quantity from the EOQ amount
C)insensitive to major deviations in the order quantity from the EOQ amount
D)sensitive to deviations in the order quantity from the EOQ amount by more than 20%

Question

Quizplus · Accepted Answer

The total cost in the Economic Order Quantity (EOQ) model is relatively insensitive to minor deviations in the order quantity from the EOQ amount. This is because the total cost curve is relatively flat near the EOQ point, meaning small changes in order quantity do not significantly affect the total cost.

The Total Cost in the EOQ Is ______