question archive The primary objective of the basic economic order quantity model is a

The primary objective of the basic economic order quantity model is a

Subject:EconomicsPrice:2.87 Bought7

The primary objective of the basic economic order quantity model is

a. to calculate the reorder point, so that replenishments take place at the proper time.

b. to minimize the sum of the annual carrying and holding costs.

c. to maximize the customer service level.

d. to minimize the sum of the annual ordering and holding costs.

e. to calculate the optimum safety stock.

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The  answer is option (d) to minimize the sum of the annual ordering and holding costs.

Explaination:

As you read earlier The Economic Order Quantity (EOQ) is defined as the total no. of products or units a company has in its listing with the minimization of its cost in annual ordering and holding.

 

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