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Recall our EOQ model of inventory management from class with known and constant demand, instantaneous replenishment, and no production. Suppose that a firm has been
Recall our "EOQ" model of inventory management from class with known and constant demand, instantaneous replenishment, and no production. Suppose that a firm has been ordering Q units from a supplier, and that at this order size, the annual cost of carrying inventory is greater than the annual cost of ordering.
Which of the following statements about the economically optimal order quantity what we refer to as EOQ and its relationship to the value is true?
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