For the basic EOQ model,what is the formula for the total annual cost?
B)(D/
Q)S + (Q/2)H
C)(Q/
D)S + (Q/2)H
D)DQ/S + 2Q/H

Question

For the basic EOQ model,what is the formula for the total annual cost?
B)(D/
Q)S + (Q/2)H 
C)(Q/
D)S + (Q/2)H 
D)DQ/S + 2Q/H

Quizplus · Accepted Answer

The formula for the total annual cost in the basic EOQ model is (D/Q)S + (Q/2)H, where D is the demand, Q is the order quantity, S is the ordering cost, and H is the holding cost. This formula takes into account both the ordering cost and the holding cost, providing the total cost of inventory management. Option B correctly represents this formula, making it the best choice. Option A is incorrect as it does not provide a valid formula. Option C is incorrect as it has inverted the terms of the formula. Option D is incorrect as it is an invalid formula, and Option E is incorrect as it is not a formula for the total annual cost in the basic EOQ model.

For the Basic EOQ Model,what Is the Formula for the Total