The Primary Purpose of the Basic Economic Order Quantity Model $\sqrt { \frac { 2 \cdot D \cdot S } { H } }$

question 64

Multiple Choice

The primary purpose of the basic economic order quantity model shown below is Q* = $\sqrt { \frac { 2 \cdot D \cdot S } { H } }$

• A) to calculate the reorder point, so that replenishments take place at the proper time
• B) to minimize the sum of carrying cost and holding cost
• C) to maximize the customer service level
• D) to minimize the sum of setup cost and holding cost
• E) to calculate the optimum safety stock

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Definitions:

Standard Form

An equation format, especially for linear equations, where Ax + By = C, where A, B, and C are integers, and A should be non-negative.

Imaginary Unit

The unit of an imaginary number, usually denoted as 'i', and defined as the square root of -1.

Standard Form

A way to write numbers using the digits 0-9, with each digit having a place value. In algebra, a standard form often refers to a way of writing equations.

Imaginary Unit

A mathematical term denoted as \(i\), used to represent the square root of -1, foundational in complex number theory.