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17 May, 02:43

The EOQ equation is derived by setting the annual purchase cost equal to the annual holding cost. True False

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  1. 17 May, 02:52
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    True

    Explanation:

    As the purchase cost is the variable cost that is the variable cost of the goods is expressed as the purchase units price x annual demand quantity and is P into D. And the holding cost is the average quantity in stocks and is q/2 and is given as H x Q / 2. Thus Q is an independent and is a function of the K, D, h Hence the E. O. Q is given as Q = √2 Dk / h
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