Even Though the Economic Order Quantity (EOQ) Is Optimal Only

question 13

Multiple Choice

Even though the economic order quantity (EOQ) is optimal only when five assumptions are satisfied, it serves as a reasonable first approximation even when these assumptions do not quite apply. Which one of the following is NOT an assumption of the EOQ?

• A) Quantity discounts can be taken advantage of for large lot sizes.
• B) The amount of an order received is exactly equal to what was ordered, without any "short shipments" from a supplier or scrap losses in the shop.
• C) Decisions for one item can be made independently of decisions made for other items.
• D) There is no uncertainty in lead time.

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Definitions:

Big Data

Any set of data that is too large or too complex to be handled by standard data-processing techniques and typical desktop software.

Variety

The diversity in types and structures of the data generated.

Nonsampling Error

Errors in data collection or analysis that are not related to the process of selecting a sample from the population.