In Example 12.3, SolverTable was used to show what happens when the unit shortage cost varies. As
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In Example 12.3, SolverTable was used to show what happens when the unit shortage cost varies. As the table indicates, the company orders more and allows more backlogging as the unit shortage cost decreases. Redo the SolverTable analysis, this time trying even smaller unit shortage costs. Explain what hap-pens when the unit shortage cost is really small. Do you think a company would ever consider a really small shortage cost? Why or why not? Then redo the SolverTable analysis again, this time trying even larger unit shortage costs. How do the results in this case compare to the results from the basic EOQ model with no shortages allowed?
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Macheys EOQ model with shortages allowed Inputs Fixed ordering cost 125 Annual interest rate 8 Unit ...View the full answer
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