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 annual demand, Q is the order quantity, S is the cost per order, and H is the holding cost per unit. This formula takes into account both the cost of ordering and the cost of holding inventory, and helps to determine the optimal order quantity that minimizes these costs. Option B is the correct formula for the total annual cost, while the other options provide incorrect formulas or irrelevant information.

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