The major mistake most users commit when calculating EOQ is:
A) Using inaccurate demand numbers
B) Using "sunk" cost figures
C) Using average costs
D) Using standard engineering costs
E) Using the wrong labor rates

Question

Quizplus · Accepted Answer

Using average costs can be a mistake because EOQ assumes that the ordering costs and carrying costs remain constant, which is not the case for average costs that vary over time. Using average costs can result in an inaccurate EOQ calculation and can lead to inefficient inventory management.

The Major Mistake Most Users Commit When Calculating EOQ Is