Suppose that instead of ordering the amount Q specified by the EOQ formula, the order quantity 0.8Q

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Suppose that instead of ordering the amount Q specified by the EOQ formula, the order quantity 0.8Q is used. Show that the sum of the annual ordering cost and the annual holding cost increases by 2.5%.

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Practical Management Science

ISBN: 1497

5th Edition

Authors: Wayne L. Winston, Christian Albright

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Question Posted: Nov 03, 2018 11:02 AM

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Suppose that instead of ordering the amount Q specified by the EOQ formula, the order quantity 0.8Q

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Using suboptimal order quantity Let Q current EOQ We know HCQSCQ where HC annual holding cost ...View the full answer

Practical Management Science

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